Wolverhampton City Council's planning committee on Tuesday 4 March welcomed an application to create 115 residential properties on the former Sunbeam site in Paul Street, Blakenhall.
The development of a site, which has been derelict since 1997, is a boost for a key gateway into the city centre.
The plan, put forward by former Rugby League player Liam Wordley, will see 32 of the houses providing accommodation for people with learning disabilities. The remaining properties would be made available for private rental.
Part of the building will be demolished and room made available for 37 parking spaces, a courtyard containing an outdoor games area, cycle parking and charging space for mobility scooters.
Other support facilities include a laundry, a small shop combined with the concierge office.
The factory, known as Sunbeamland, dates back to the 19th century and housed a number of manufacturers, most notably cars.
Councillor Peter Bilson, Wolverhampton City Council's Cabinet Member for Economic Regeneration and Prosperity, said: "This is excellent news.
"I am delighted that such an iconic building, that has lain empty for far too long, is going to be given a new lease of life in the form of residential properties.
"It is also very pleasing that the majority of the locally listed building will remain as part of the development.
"We are committed to regenerating the city and developments such as this will help us achieve that."
Planning committee agreed to give officers delegated authority to finalise the details with view of approval.
- released: Thursday 6 March, 2014