The Conference North side have been without a permanent home since their ground was destroyed by flood water in the summer of 2007.
The Tigers have ground-shared with other local sides ever since.
The plans for a 4,000 capacity stadium, including a 1,000-seat stand, were given the go-ahead by the city council.
The club's chairman Mike Dunstan said they were "absolutely delighted" and that it was "a big move for the club".
Mr Dunstan said: "Our owners put in a huge amount of work on getting the ground's application in and showed real tenacity.
"The fans have shown real tenacity whilst we've been away for seven years, so it's just great for everybody that we've got a light at the end of the tunnel."
He said it was "difficult to put a timescale" on when the stadium would be ready and said it would be at least 12 to 18 months.
Regarding a future flood risk, he said: "We're very confident we wouldn't be risking the club's future on building something which wouldn't survive a major flood."
The club has been based in Cheltenham since 2010, having previously shared with Forest Green and Cirencester.
Gloucester City Football Club's planning application for a new stadium on its original site at Meadow Park has been approved by councillors.