London mayor Boris Johnson has used his call-in powers to approve the major redevelopment at Southall gas works which was refused by Ealing Borough Council and Hillingdon Borough Council last year.
He said the development, which includes 3,750 flats, a town square, retail and commercial units, an hotel, cinema and recreational facilities, would deliver significant regeneration.
The approval followed a public hearing and the developer will contribute £22m for transport infrastructure, education and health facilities and public realm work under a planning agreement.
"This application is clearly of major significance to London, with the homes it will deliver and the jobs it will create," said Mr Johnson.
"West London is an important driver for the capital's entire economy and within a decade it will become one of the best-connected regions in the UK with the arrival of Crossrail. Failure to give the Southall application the go-ahead and develop this key brownfield site could be detrimental to the future economic prosperity of the area."
Only 2,500 houses can be built before South Road Bridge near the development is widened under the agreement to increase traffic flows.