The project forms part of the council’s plan to double the size of the Lincolnshire town over the next decade.
The application for the 140-hectare site that borders Lea and Corringham, submitted by local firm Thonock and Somerby Estates, is part of the wider Gainsborough Regained scheme, which could ultimately see 8,000 homes built.
The latest plan will see more than 200 homes built every year over the next decade in the south of Gainsborough and includes two primary schools and new GP surgery buildings.
West Lindsey District Council’s decision to support the application will now be referred to the secretary of state, who will decide if the project requires further scrutiny.
Chairman of the economic development and regeneration committee, Jeff Summers, said the decision represented a very significant milestone in the history of the town.
He said: “Gainsborough has been allocated Growth Point Status and this is the first of a number of proposals that will increase the population to about 36,000.”