Controversial plans for 675 homes in Cane Hill have been approved by the Mayor of London.
Boris Johnson said the development, which will see Barratt build family houses, flats and offices at the site of the former mental hospital in Coulsdon, was "much-needed".
Croydon Council granted outline permission for 488 homes and full consent for 187 homes in April during a fractious planning committee meeting.
The site is owned by the Greater London Authority.
Mr Johnson said: "Cane Hill is a truly incredible site and one of London’s most infamous abandoned sites.
This decision marks the next chapter in Cane Hill’s fascinating history, providing 700 much-needed new homes in this part of South London."
Critics of the development have aired concerns about access roads and the use of green belt land.
A spokesman for Barratt said: "We are extremely grateful to everyone who has helped to get the plans to this stage, in particular to the residents and local stakeholders who have provided us with such valuable feedback about our proposals.
"We will continue our work with the local authority, residents and local stakeholders going forward as the plans continue to evolve during the next stages to ensure that we deliver a sustainable community on this prominent site which fits in with the surrounding landscape."
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