The Dons aim to build an 11,000-seat stadium, which could be expanded to 20,000 later, on the site of Wimbledon Greyhound Stadium.
The club will also partner up with Galliard Homes to deliver 600 homes at the Plough Lane site, literally yards from the former football ground.
This will help to fund the £16m cost of building a new stadium.
The original Wimbledon FC was forced to leave Plough Lane in 1991 following the publication of the Taylor Report.
And after sharing Selhurst Park with Crystal Palace until 2002, moved to Milton Keynes.
AFC Wimbledon, formed in 2002 in response to the relocation, have played all their home games at Kingsmeadow, also home to non-league Kingstonian.
Dons chief executive Erik Samuelson, said: “We are all absolutely delighted. This is the most important event since we reformed 13 years ago.
“This is our home and we are delighted that we have been granted planning approval to return to Wimbledon.”
“On behalf of the club and our supporters, we would like to place on record our thanks to Merton’s councillors who have demonstrated their support for our club and our work by supporting us to come home.”
Galliard Homes Director Mike Watson said “We are delighted to have received planning permission to redevelop this important brownfield site.
“These new homes will make a significant contribution towards Merton’s own minimum 10 year target for new homes and the regeneration of this part of Merton.”