The three-acre site, purchased as part of the College’s long term investment strategy, will be redeveloped to provide a mix of residential and commercial development.
As part of the development, Homerton will also pay for the road layout to be changed to provide a designated turn for cyclists turning right from Hills Road onto Purbeck Road.
Income from the scheme will be used to enhance the number of bursaries and scholarships on offer to students.
Keith Waters, Estates Manager for Homerton said: “This announcement marks the start of our next 20 year development plan which will centre on academic needs.
“We are delighted to receive the go-ahead and are looking forward, not only to increasing our provision of housing for Fellows, but also having the opportunity to make visual improvements to what historically has been a neglected area.
“The existing site is rail passengers’ first view of Cambridge when they travel from London by train and we believe that our plans for high quality, well-designed buildings will enhance the public perception of our City.
“Throughout the process, we have been very pleased to have had the support of our neighbours and tenants with whom we have been in regular dialogue as plans have progressed.”
Professor Geoff Ward, Principal of Homerton said: “We believe that approval of our planning permission will deliver benefits all round.
"Not only will it provide long-term income for the College which can be re-distributed in terms of bursaries and scholarships, but it also addresses the need for accommodation for our Fellows, freeing up much-needed housing in the City for families.
"The development phase over the next two years will also bring good employment opportunities in the area”.
It is anticipated that work on the demolition of existing buildings will commence shortly, with plans for the development to be completed by Summer 2016.
Homerton College has received permission for a £60 million development adjacent to its site on Hills Road.
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