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NSW Premier Barry O'Farrell said on Saturday that the Department of Planning and Infrastructure had approved the Pemulwuy redevelopment project in the inner-city suburb.
Mr O'Farrell said Pemulwuy would include 62 affordable houses, a 42-unit student housing complex, a gym, a child-care centre and a community gallery, as well as open space.
He said there would also be shops and a 115-space underground car park.
"The approval of this project by the Department of Planning and Infrastructure will allow for the creation of a vibrant new housing, community and cultural precinct close to transport and the University of Sydney," Mr O'Farrell said in a statement.
"This part of Sydney has been crying out for renewal for many years and it is fantastic this long-running issue has now been resolved."
