The 32 hectare scheme, which will be delivered by Persimmon Homes and Hogg the Builder, will see the construction of 655 new homes as well as parking and play areas. The scheme will be developed across six phases.
The Secretary of State for Communities and Local Government granted outline approval to the plans in 2007 following a public inquiry.
The development site has been described by English Heritage as the "most likely candidate" for the Battle of Fulford, although it said the battle site had not been "securely identified".
Local campaign groups have objected to the proposals to build housing on the site. The Council for British Archaeology has said that granting planning permission to the scheme would be "unwise" and could affect the potential to determine the site's archaeological significance.
The Council welcomed the planning committee's approval, according to local reports.
“The council is determined to kickstart stalled developments and increase the number of new homes built in York, and we look forward to working with Persimmon in order to get housebuilding moving on this site,” said the Council's assistant director of city and environmental services Mike Slater.
Work on the site is expected to start this spring.
