It also received outline consent to build a new hotel or student accommodation building on the car park of the existing site.
No.1 Hagley Road building in the Five Ways area was built as offices in the 1970s and its current tenants include transport company National Express.
Local architecture practice, Associated Architects, who masterminded the Mailbox, has developed the new plans for around 180 luxury homes.
Four new penthouse floors will boast spectacular views and will add a new skyline feature at the top.
Martin Payne, fund manager at Henderson Global Investors, said: “We are delighted to have received consent for this scheme, having worked closely with the council and our advisors to ensure the consent allows a viable development of the site whilst providing for improvements to local amenities and providing for affordable housing.
“The proposals will not only give a viable long-term use to the building, but also generate the ability to greatly enhance the external appearance of this major landmark which sits in one of the key gateways to the city centre.”