The planning committee approved Phase One of the Rochdale Riverside scheme for a complex of new shops and a cinema in the east of the town centre.
The development features new Marks and Spencer and Next stores with Reel Cinemas operating the cinema.
Developer Genr8 said it would be the "final element" of the town's regeneration.
The scheme will have about 24 shops and restaurants.
Council leader Richard Farnell (Labour) said: "This is yet more progress for this important development, which will bring High Street names that are not currently represented in Rochdale, as well as thriving restaurants and a cinema, which will create a fantastic destination for our residents and visitors.
"It will also boost our local economy by more than £17m and create around 1,000 jobs."
Gary Davies, of the Rochdale Development Agency, said the approval showed Rochdale was bucking the national trend of town centre decline.
"This decision is part of a wider regeneration which also includes the way the council has encouraged new retail outlets with discounted business rates - at present 17 out of 20 retail units are occupied in the town centre," he said.
Mike Smith, Partner at Genr8 Developments, said: "We recognise that this scheme will play a significant role in the regeneration of Rochdale and it is therefore imperative that we attract the right mix of occupiers to boost the local economy and establish Rochdale as a key leisure and retail destination."
Councillors also approved outline plans for the scheme's second phase, which will see a further investment into the town centre, with potential for new offices, a hotel, apartments and commercial uses.
The communities secretary will give the final decision.
Work could start on the site in Smith Street in the autumn.
A plan for a £60m retail development in Rochdale town centre has been backed by councillors.