Birmingham City Council approved the full planning application for the scheme at a meeting yesterday. The proposals were also submitted by the council.
The development is earmarked for the site of the former Birmingham City University campus at Perry Barr in the north of the city.
According to a planning report, which recommended approval, the scheme would deliver a mixed-use residential-led development to first serve as the Commonwealth Games athletes village.
It would later be converted to 1,146 residential units, 268 extra care apartments, 1,237 square metres commercial floorspace, and a community centre with associated parking, landscaping and infrastructure.
The report said the scheme would deliver 344 affordable units (24 per cent). Planners advised that local planning policy requires 35 per cent affordable housing "unless it can be demonstrated that this would make the development unviable".
The report said a financial appraisal, submitted in support of the application, had been independently assessed and this assessment did "not disagree with the applicant’s conclusions and notes that the current planning obligations are only possible due to the significant amount of public funding, as such the current offer exceeds the scheme’s viability".
Overall, the report said, the scheme would "enable Birmingham to accommodate athletes and associated support teams for the internationally important Commonwealth Games in 2022".
But it added that "more importantly, post games the proposal would result in a significant legacy development which would provide much needed well-designed new homes, high quality informal and formal public open space as part of a sustainable urban development in accordance with local and national planning policy".
An urban village in the centre of Birmingham was included on Planning's list of the biggest housing permissions this year.