Hartlepool Council's planning committee voted unanimously on Wednesday to approve Graythorp Energy Limited's application for the plant, which is intended to have a generation capacity of up to 49.5 MW of electricity.
According to a planning report, a combined heat and power plant at the site would also enable heat, in the form of steam or hot water, to be exported to local users.
The plant, which would use non-hazardous residual waste left over after recycling and composting that would otherwise be landfilled, would be 54 metres tall and would be topped by a 90 metre chimney stack, the report advised.
Once the plant is operational, the applicant estimates that it would create 40 new permanent full-time jobs, adding £2.72m to the local economy per annum, the report said.
The new plant is proposed for 6.7 hectares of mainly undeveloped greenfield land, currently used for agriculture and horse grazing, which is "predominantly surrounded" by two local industrial estates, according to the report.
The site is within the development limits of the main urban area of Hartlepool and is on land allocated for "specialist" industrial uses in the council's 2018 adopted local plan, planners said.
The committee report said that the proposed uses fit with the area's allocation for "potentially polluting and hazardous" industrial development.
The applicant told planners that an adjoining 4.1-hectare piece of land, which is specifically earmarked for a waste management and recycling facility in Hartlepool Council's local plan, would be too small to accommodate its proposed plant.
The council's planning section said the applicant's justification was "sufficient" and that therefore its proposal did not constitute a "significant departure" from the council's development plan.
Members were also advised that the proposed development would produce a "substantial amount" of renewable energy, which would help Hartlepool meet its climate change and environmental impact reduction targets, while also assisting its goals to cut the amount of waste going to landfill.
The applicant anticipates that the energy centre would take three years to build and have an operational lifespan of at least 25 years.