Niche Drinks has invested Â£12m into The Quiet Man at Ebrington, which will also include a visitor centre.
It is the first whiskey distillery to open in the city for nearly 200 years.
The project got the thumbs up from Derry City and Strabane District Council on Wednesday.
Ebrington was formerly an Army base but it is now the largest single regeneration site in the city.
"I named the whiskey after my father who had been a bartender for 52 years," Niche Drinks' Ciaran Mulgrew told BBC Radio Foyle.
"He always used to say that in a lifetime working behind the bar he had seen everything and heard every story there was to hear but like all good bartenders he was true to his code.
"He told no tales so they called him the quiet man and I thought, that's what I'll call the whiskey."
The new distillery is to start operating within a year and the visitor centre will open by the middle of 2018.
By the end of the 19th century, Derry was said to be producing more whiskey than any other city in the world.
Known as the whiskey capital of the world, the craft died out with the closing of Watts distillery in the 1920s.
The company behind a new whiskey distillery in Londonderry has said it will create up to 35 jobs when it opens next year.