Torfaen council has approved plans for the redevelopment of Cwmbran's Arvin Meritor site, in a move which it says will create nearly 1,200 jobs.
The council described the plans as the "single biggest regeneration project of its kind in the town's history".
Plans include a Morrisons store with petrol station, a 60-bedroom hotel and new car parks.
Council leader Bob Wellington said the development "ensures the viability of this area of Cwmbran".
As well as jobs created within the development, the council said car parts firm Arvin Meritor would increase from its staff numbers from 400 to 550.
The proposals form a key part of the authority's local development plan.
Councillor Wellington, said: "We have to embrace this development, it will provide jobs for more than 1,000 people and ensures the viability of this area of Cwmbran - exceptional news given the current economic climate.
"Arvin Meritor has a long and strong relationship with the local community and we have an excellent working relationship with the company.
"This development will transform the leisure and retail opportunities in the heart of the town and I know the people of Cwmbran share my excitement and can't wait to see the work start on what will be a superb, high-quality development."