The proposed incinerator at King's Lynn has been granted an environmental permit to operate by the Environment Agency.
The news is a blow to campaigners who have been fighting the development of the Willows Power and Recycling Centre at Saddlebow.
However, the news was welcomed by Norfolk County Council.
Bill Borrett, the cabinet member for environment and waste, said: "I welcome this important announcement by the Environment Agency.
"It is a clear and unequivocal statement by an autonomous and independent statutory authority that the Willows can operate without harming the environment or human health.
"I now hope, that with all the statutory authorities' opinions about the Willows before us, and opponents' fears about health and environmental matters shown to be unfounded, the conversation about this proposal can begin to turn to the very significant benefits that this plant will bring to Norfolk in the future.
"Not least of these are the £8m a year savings it will bring us - or £200m over the 25 year contract - compared with the cost of continuing to use landfill."