The £21 scheme to save 150 homes from destruction will see construction of 390m sea wall and stabilisation of the soft cliffs and coastal slopes behind it at Church Cliff and East Cliff, to the east of the town.
Council chiefs will now select consultants to carry out final designs for phase four of the long running coastal protection plan ahead of inviting contractors to bid for works.
Principal engineer Nick Browning said: “Technical approval means we can go ahead with finishing the detailed design and getting tenders for the main construction contract back.
“Once we get the tenders back we will apply for financial approval.”
The council will apply for £16m from Defra, while Dorset County Council has committed up to £4.3m as the scheme will protect vital transport and infrastructure links in the east of the town.
Planning permission has already been secured and work is expected to start in spring 2012, taking around two years to complete.