The proposed development includes two hotels, a leisure club, together with new residential apartments and 150-space multi storey car park.
The site was originally bought from the council by Redrow, which aimed to build 208 flats there.
But the developers plans came a cropper during the recession, forcing Redrow to sell the site to developer Havard Tisdale.
The main four or five star hotel will contain 167 bedrooms, 59 apartments, a skybar, a leisure club, swimming pool, conferencing facilities and a café. The second 3 star hotel will consist of 114 bedrooms.
Cllr David Kelsey, chair of the planning board, said: “The applicants listened to what the residents and board members have said and they came back with several amendments that the board members are more than happy with.
“I think it’s quite a good scheme. It will be an iconic building for the town centre and we need to move forward. We cannot have these sites sitting empty for years.”
Havard Tisdale is currently involved in another regeneration scheme in Torquay, which includes an 80 bedroom hotel, a multi-screen digital cinema, new restaurants and retail units, together with luxury apartments.