Manchester City Council has approved plans for the £110m campus for nursing and teaching students at Birley Fields on Princess Parkway in Hulme.
Manchester Metropolitan University submitted a detailed planning application to the council in February for the new campus aimed at 6,000 students.
John Brooks, vice-chancellor at Manchester Metropolitan University, said: "We are delighted that the city's elected representatives have unanimously backed this progressive plan. This is the right plan for our students who will get a fantastic new experience and the right plan for the community in terms of the positive impacts it will have on educational aspiration, business growth and partnership working."
Sir Richard Leese, leader of Manchester City Council, added: "This is a significant moment in the regeneration of Hulme and neighbouring areas including Moss Side. It is particularly welcome investment in the current difficult economic climate and will create jobs and significant spin-off benefits for local businesses.
"It will also open up new higher education opportunities for local people and further enhance Manchester's world-class university sector, helping attract and retain people within the city."
The plans have received detractors with the Save Birley Fields campaigners calling for the proposals to be dropped, claiming consultation was poor, information about its impacts on traffic has not been made available and the existing green space is needed and should not be built upon.
Manchester Metropolitan University argue politicians, housing groups, and the NHS have backed the plans which include a sports hall, drama studios and other facilities available for community use and would see the phased building of student accommodation according to demand.
Drivers Jonas Deloitte, which advises MMU on planning matters, carried out a survey and said it found 80% of residents and businesses thought the campus would have a positive impact, and the university has encouraged local people to help shape the plans through questionnaires and community meetings.
MMU said a separate impact study carried out by Roger Tyms and Partners found that the campus would generate an additional £29m spend a year with local businesses in Hulme and Moss Side.
The campus incorporates green technologies into its design such as force ventilation and solar-heated water, car park berths for electric cars and proposals for enhanced public and sustainable transport.
Architects Sheppard Robson has designed the campus. Rupert Goddard, associate partner at the practice, said: "The design combines diverse public spaces with retained and newly planted trees, strong sustainability credentials and innovative architectural design, and will become a landmark project for Hulme and the city."