The 4.9m sq ft Wood Wharf scheme will see Canary Wharf extended to the east with the addition of 30 new buildings.
Completion of the first phase of the plans will coincide with the arrival of Crossrail in 2018.
The green light comes as Canary Wharf owner Songbird Estates is fighting takeover bids from Qatar Investment Authority and Brookfield Property Partners.
Sir George Iacobescu, chairman of Canary Wharf Group, said: “We are delighted to have secured the permission of the Mayor of London to proceed with the next phase of Canary Wharf.
“This new major district will reinforce Canary Wharf’s position into the future as one of the most exciting and vibrant places to live and work in London.
“The new phase of Canary Wharf will include up to 3,610 new homes, and 1.9m square feet of office buildings designed to accommodate the fast growing technology media and telecoms sector as well as financial and professional services firms.
“It will offer high street retail units to complement Canary Wharf’s existing retail offer, as well as affordable housing on site.
“It will also include substantial new green parks and dockside walks, a library, a large GP surgery, a school for 420 children, a community sports hall and community space.”
The centrepiece of the scheme will be a 57 storey cylindrical residential skyscraper facing the waters of South Dock, designed by Herzog & de Meuron, the Swiss architects behind the Tate Modern and the “Bird’s Nest” Olympic stadium in Beijing.
Canary Wharf Group, will also be contributing in excess of £60m towards Crossrail and an additional £27.5 million for other infrastructure needs.
This will include over £10m for local transport improvements, some of which will be used to improve the nearby Preston’s Road roundabout.
At least 25 per cent of the new homes will be affordable but a review mechanism has been put in place that could see the number of affordable homes rise to 40%.
- 3,610 homes (2.5m sq ft)
- 1.9m sq ft of commercial offices
- 420,000 sq ft of retail and leisure
- Two hotels
- 8.9 acres of interconnected public spaces
The Mayor of London, Boris Johnson said: “This vast development will transform a currently derelict brownfield site beyond all comprehension into a thriving new community with thousands of new homes and jobs.
“This is exactly the kind of scheme that we need to accommodate London’s booming population that is set to break through the nine million mark within the next decade.”