The city council rejected the scheme despite the controversial gasification plant being central to the joint venture’s waste contract with the council, over concerns on traffic, health and appearance.
But after two public inquiries, the planning inspector has ruled the project cannot be blocked on planning grounds.
As part of the Resource Recovery Solutions joint venture, Interserve will construct the proposed plant at Sinfin Lane, which is designed to slowly heat material to produce a gas that could be burned to create electricity.
The plant, which will be operated by Shanks, will be capable of handling 190,000 tonnes of Derbyshire’s and Derby city’s waste annually – most of which would otherwise go to landfill.
Ian Goodfellow, managing director of Shanks UK, said: “We are naturally pleased with the inspector’s decision.
“We believe that development of the proposed residual waste treatment facility at Sinfin Lane is the most cost-effective and sustainable way for Derbyshire County Council and Derby City Council to divert residents’ waste from landfill and contribute to increasing the region’s recycling and recovery rates.”