Plans for a £230m regeneration of Barry Waterfront, have been approved at a meeting of Vale of Glamorgan council.
The plans include the development of residential properties, cafes, a hotel and a new link road.
The Quays development marks the final phase in the large-scale regeneration of the area.
The scheme will also see a new £5m link road from the town centre to Barry Island, a school, hotel, supermarket and up to 2,000 homes.
Planning committee members visited the site before making their decision on Thursday evening.
The scheme includes a mix of private and affordable housing, cafes, restaurants, children's play areas and public spaces.
Officers recommended that the committee approved the plans, which were put forward by developers Taylor Wimpey UK Ltd, Barratt and Persimmon Homes.
The scheme aims to connect the town with the nearby tourist spot of Barry Island, made famous recently by the BBC series Gavin and Stacey, and rejuvenate the waterfront area.
It follows earlier redevelopment including a health centre, pharmacy, new road links, 686 new homes, a supermarket and 5,600 sq ft of retail space.
The existing waterfront has also been opened up so the public can use it.
Speaking before the meeting on behalf of the Barry Waterfront Consortium, Richard Keogh, said: "This is a hugely important next step to bring this major scheme to Barry.
"The consortium started this project in 2007, before the global banking crisis and property crash, and has remained committed through some difficult times.
"Delivering a major scheme like The Quays is a complex process, and the changing financial climate has created issues that both the consortium and the council are having to deal with.
"Barry has long deserved this level of financial investment. This scheme will provide the catalyst for further investment in Barry and the south east Wales area, and is a great opportunity to significantly boost the local economy."
The group has said it had met with the community who have helped to refine the plans.
The group claims the project will pump an extra £150m into the economy over 20 years, create 870 new jobs and 175 spin-off jobs from companies and services on the regenerated waterfront.
However, there have been local concerns about the impact on local traffic and existing businesses in Barry town centre.
Paul Hayley, chairman of community group Pride in Barry, told BBC Radio Wales there were "some issues" but added: "Much work has been done to alleviate some of that.
"If you look at Holton Road, the main shopping area, that's just undergone significant regeneration and... the Barry Library and Town Hall [have been] regenerated. That's now the third most visited library in Wales.
"The pavements have all been renewed, all the street furniture there...[but] more needs to be done."
Mr Hayley said the increased number of houses on the waterfront would inevitably create increased traffic as Barry was largely a dormitory town for Cardiff.
But he urged businesses in Cardiff to relocate to the Barry Waterfront area.
Rob Thomas, the council's head of planning and transportation, said: "The redevelopment of the 43-hectare brownfield site is critical to the continuing efforts of the Vale of Glamorgan Council in regenerating Barry.
"The scheme will breathe new life into this part of Barry as a consequence of this multi-million pound investment with new jobs being available throughout the construction phase and the provision of jobs into the future as a consequence of the proposals for retailing, cafés, bars, restaurants and other services."