A joint planning committee of Cambridge City Council and South Cambridgeshire District Council approved the outline proposals at a planning committee meeting on Wednesday.
Marshall Group Properties and Endurance Estates Strategic Land submitted the outline application for the development, which would include a retirement living facility, a local centre, primary and secondary schools and community facilities.
The site, currently farming land, is located within the administrative boundaries of Cambridge City Council and South Cambridgeshire District Council, and is allocated for development in the authorities' adopted local plans.
According to a planning committee report, the "northern part of the site is designated as green belt within the administrative area of South Cambridgeshire".
The land sits within the plan's Cambridge East allocation which is intended to provide up to 12,000 homes. The Cambridge East allocation includes the Cambridge Airport site.
According to a planning report into the 1,200-home application, the airport is not due to relocate from the site until 2030.
The scheme considered this week proposes up to 1,200 homes on the 56-hectare site at Coldhams Lane.
The planning report said it had been demonstrated that "acceptable mitigation of environmental and health impacts (including noise)" from the airport could be provided and secured by planning conditions and a section 106 agreement.
It also said that "careful consideration" had been given to how the ongoing activities at Cambridge Airport "would interact with any new residential use".
Officers said they were satisfied that "with appropriate mitigation secured through planning conditions and planning obligations, any proposed new residential use will have an acceptable level of amenity and will not impede on the ongoing use of the airport".
This would include agreement that the cessation of the use of the airport runway for taking off and landing will occur prior to occupation of the first home at the site.
On this basis, the report added, "the continued authorised use of Cambridge Airport is not considered to pose a safety risk".
The report went on to say that about 1.8 hectares of the site that is in green belt would be used as school playing fields and public open space and therefore would not, under the National Planning Policy Framework, be considered inappropriate development.
Elsewhere, the report advised that the development would deliver "a significant number of new homes, which will help to maintain the Greater Cambridge five-year housing land supply and deliver affordable homes".
The document added that the proposals include a 40 per cent affordable housing level (480 units), which accords fully with development local policies which require a minimum of 40 per cent affordable homes for such schemes.