City council planners voted in favour of the redevelopment of the Anfield Road Stand on Tuesday, despite concerns expressed by residents and environmental groups about the impact on nearby Stanley Park.
The Premier League club's project is expected to be completed in 2023.
"This is a huge milestone in our journey towards bringing more supporters into Anfield," said Liverpool managing director Andy Hughes.
"We underwent a rigorous two-stage public consultation period during the planning process for this project and I would like to thank everyone who has offered a contribution to that."
As part of the application, the club has also been awarded permission to hold up to six concerts and major events at the stadium for a period of five years.
