Derry City Council has approved a £50 million retail and housing development on a greenfield site near Crescent Link in the Waterside area.
It will include a retail park, warehouses, more than 1,000 houses, a leisure centre, health centre and community centre. A hotel and restaurant will be added later.
It is expected up to 300 people will be employed in the retail section. It is also expected to create 200 construction jobs.
The Department of the Environment granted outline planning permission for the development, which has been welcomed by DUP Assembly member Mr William Hay.
"This scheme will be vital for breathing life back into the Waterside area, which has been neglected in terms of large-scale commercial developments in recent years."
A Waterside estate agent, Mr Robert Ferris, believes the development is likely to attract more business.
"Over the last 10 years there has been a tremendous change in the city centre and I think people in the Waterside have been very envious of that," he said.