Applicant Velocys, which describes itself as a sustainable fuels technology company, said the facility will be the first of its kind in the UK.
Plans for the facility, referred to as Altalto Immingham, have been developed in collaboration with British Airways and petrochemicals giant Shell.
The application site is located two kilometres from the village of Stallingborough and four kilometres from the town of Immingham in North East Lincolnshire.
Councillors resolved to grant full planning permission for a plant of up to 62 metres in height, chimneys up to 80 metres high, plus the installation of pipe lines, a rail link, and other associated infrastructure.
North East Lincolnshire planning officers said the development is expected to process around 600,000 tonnes of waste per year.
Planning permission was granted in 2011 for a bio-ethanol plant on the same site but the approved scheme was never built, the planning report said.
Officers said that local planning policy identifies a requirement for the development of waste facilities.
“Overall, the proposed development is consistent with the local plan,” they said.
Councillors were advised that land surrounding the site is “of industrial character” and that the proposed fuel plant “would not be seen as out of character or context”.
Officers said the scheme was “unlikely to result in any significant effects” on nearby protected ecological sites.
While a holding objection was submitted by environment watchdog Natural England in February, citing concerns over issues including air quality and effluent, officers said the organisation has since confirmed that information provided by the applicant “goes a long way to addressing their concerns” and the holding objection is expected to be withdrawn.
In conclusion, officers said: “It is not considered the proposal would either in isolation, or cumulatively, significantly affect the character of the area, neighbouring land uses, ecology, the highway network or the environment.”
Velocys said construction is expected to begin in 2022 and the facility could be producing aviation fuel from 2025.
Henrik Wareborn, chief executive at Velocys, said: “Sustainable aviation fuels are essential for decarbonising this challenging sector and achieving net zero emissions by 2050.”
Last year, plans for a 299MW gas-fired power station in North East Lincolnshire were submitted to the Planning Inspectorate. A decision is expected by August this year.