The Welsh government has given final approval to deregister common land to allow the project to be built at a site in Rassau, Ebbw Vale.
Backers, including Blaenau Gwent council, have offered 320 hectares (800 acres) of replacement land.
The firm behind the project said it would regenerate the area.
A Welsh government spokesman said deputy minister for farming and food, Rebecca Evans, had granted permission to deregister the land at Trefil Las and Twyn Bryn-March Common in Ebbw Vale, subject to conditions.
Leader of the council Hedley McCarthy said: "We welcome the announcement from Welsh government and, as a council, remain fully supportive of the Circuit of Wales development and the benefits it could bring to Blaenau Gwent and the surrounding areas.
"We look forward to continuing to work closely with the developer on this exciting project."
Developer Heads of the Valleys Development Company (HOTVDC) said the approval was a "positive milestone" and was "vital" for the development to proceed.
Chief executive Michael Carrick said it would lead to improved maintenance and access to the replacement common land.
"The Circuit of Wales has the ability to generate thousands of employment opportunities, attract greater long-term investment and deliver regeneration into Blaenau Gwent and South Wales," he added.
The development aims to create 6,000 jobs and is set to host the MotoGP from 2017.
HOTVDC has said it has Asian financial backers for the project, which has a £200m private finance target to get started.
The rest of the money is expected to come from Welsh government support and local authorities.
Plans for a £325m motor racing track, business park and hotels in Blaenau Gwent have passed the latest planning hurdle.