The Environment Agency has granted Amey Cespa an environmental permit for a waste recovery and gasification facility at Milton Keynes.
It decided the plant would not harm health or the environment.
Milton Keynes Waste Recovery Park received planning permission in July from the local council.
The plant will be built on a brownfield site in Old Wolverton and is expected to save the council more than £50m on its waste management bill when it becomes operational in 2016.
Ross McIntyre, the agency’s regulatory officer for the site said: “By awarding this permit to Amey Cespa, we have determined that the waste recovery and gasification facility will not have an impact on human health, air, water, land, habitats and species of animals and plants.
“When the site is built, we will ensure that Amey Cespa operate it in a way which meets our strict environmental standards and has minimal impact on anyone living nearby.”