The first phase of Redheughs Village, the Edinburgh Garden District, is set to deliver 1,350 homes, including 330 new, affordable homes.
Plans also include funding for a new primary school and nursery, neighbourhood centre, retail, road improvements, and a 40-acre community park.
Redheughs will be accessible by public transport, including tram and rail, as well as existing bus routes.
Active travel routes will also be delivered to encourage sustainability.
David Murray, managing director of Murray Capital, which owns Murray Estates and is leading the development, said: “We are pleased to have received final approval from the Scottish Government for the first phase of the Garden District after a long and comprehensive planning application process.
“The demand for sustainably-built family homes in close proximity to the capital is acute, and we look forward to commencing the work that will deliver 1,350 much-needed houses, supporting infrastructure and civic amenity.”
