The rubber stamp has finally gone onto an ambitious bid which will see the former Sainsbury's supermarket site, which straddles Northgate Street and Hare Lane, being replaced by a mixed development of market and affordable flats – as well as a new commercial unit.

As reported in Punchline-Gloucester.com in February, resolution has been anticipated for the long-delayed £6m scheme which is the brainchild of London-based Clarehouse Developments and which will see the existing 3,911sqm building airbrushed from the cityscape – much to the relief of many parties.

At a meeting last night, the City Council approved the outline scheme which will see:

● Three blocks of flats: the first, close to Worcester Street being five storeys, a four-storey building on Northgate Street and a three-storey one on Hare Lane. Apertments will collectively share a private landscaped zone. In all, 11 of the flats are destined to be marketed on an affordable basis.

● A new commercial unit will sit at ground level on Northgate Street and will measure 121sqm. No specific use has yet been assigned but the is earmarked for retail/food and drink/nursery/leisure or medical use.

● A contribution of £250,000 towards infrastrucutre investment for potential use in library services, green spaces and education.

● A provision to ensure the iconic mural on the side of the original building, by Henry and Joyce Collins, sees new life when it is relocated to an entrance foyer on Northgate Street.

Sir John Sainsbury cut the ribbon on the original supermarket in 1970 and the road to redevelopment for the brownfield site has been bumpy: local clamour to keep a supermarket on site led to a petition to save it, although a report from planning officers acknowleged the "challenge" of attracting a long-term tenant to the ground-floor retail zone.

The news of progress on the development was welcomed by Dan Ponting, who operates Cheltenham-based Elijah Willow Construction, which is currently engaged in three separate projects for flat conversion and retail regeneration within Gloucester's urban heart.

Dan told Punchline-Gloucester.com: "It's brilliant. That was a problem site and a headache technically so complete replacement makes good sense. I think the balance is right too, given the retail inclusion. When you look at what is available in the locality, given proximity to the Forum and a lack of food and drink allocation, my gut feeling is that the site would be ripe for something like a Co-Operative store, or something similar.

"If we are trying to shift the imbalance in the city centre to get actually people living in the centre, this is the kind of project that only adds momentum to that positive force for change."