The planning committee of East Hampshire District Council has approved the Homes and Communities Agency's (HCA)plan to construct 500 new homes over an area of around 3ha at the Louisburg Barracks site.
In addition to homes, the planning application also includes the construction of a new skills training centre and the first phase of a new relief road to provide access to the site.
The project is part of HCA's plan to build around 3,500 new homes and generate around 5,500 jobs in Whitehill and Bordon.
This phase of the project is expected to provide a huge economic boost for the region and generate around 500 new jobs.
HCA is currently searching for a development partner to work with local partners and residents to produce detailed proposals for the homes at Louisburg next year.
HCA area head Kevin Bourner said: "This is another positive step towards bringing forward real and positive change in Whitehill and Bordon, with high-quality new homes and jobs that the area needs.
"We have never underestimated the scale of the task needed to make the most of the opportunity afforded when the MoD leaves the area. The progress we have made here demonstrates that we are taking the right steps towards achieving this ambition.
"There's a lot of work that still needs to be done and we remain committed to bringing forward these exciting and transformational plans for the area."
East Hampshire District Council deputy leader and commercial contracts portfolio holder councillor Richard Millard said: "This is the second major planning application to be approved as part of the town's regeneration and it shows just how far this project has progressed over the last few months.
"This scheme will radically transform the former Army barracks into a thriving community with 500 much-needed homes and jobs, and contribute significantly to a step change in the lives of everyone in Whitehill and Bordon. It is a really exciting time for Whitehill and Bordon residents and I can't wait to see work starting on the site."
The council's approval is subject to completion of legal agreements to build schools, sport, leisure and open space, transport and community facilities.
Construction work will begin after the relocation of the Ministry of Defence training operations next year.
Image: An ariel view of the proposed housing scheme at the Louisburg Barracks. Photo: courtesy of the Homes and Communities Agency.