If approved, the site will become home to 132 new properties.
The site is currently home to two popular restaurants and a health food store.
The firm behind the redevelopment previously designed the world’s tallest building.
Developers are able to upsize their buildings if they agree to put accommodation aside for those on average incomes.
Members voted 226 to 91 in support of the decision.
Concluding their legal battle with the NSW government, the council has set a precedent that state planning controls are not entirely unchallengeable.