The North East Space Skills and Technology (NESST) Centre at Northumbria University is expected to create hundreds of new jobs and bring in £260 million to the region over the next 30 years.
The £50 million facility will overlook the Central Motorway and take over the site of the university's Wynne Jones Building, which has already been partly demolished.
The project has been backed through multi-million pound investments from US aerospace and defence firm Lockheed Martin and the UK Space Agency.
It will feature satellite manufacturing and testing facilities, electrical and laser communications labs, lecture halls, offices, and a full-size replica rocket.
Designs for the site were backed unanimously by the planning committee on Friday 9 February.
Leader of Newcastle City Council, Cllr Nick Kemp, said: “The UK’s space industry is worth more than £17.5 billion to the economy and employs 48,000 people in some of the most skilled and productive jobs.
“We are fortunate that Northumbria University is one of the leading universities for solar and space physics making it a valuable asset to the region, so naturally I am delighted that this space and technology centre has been approved by planning committee.
“It’s an exciting development that will support the creation of 350 jobs and inject £260m into the North East’s economy.”
Prof John Woodward, faculty pro-vice-chancellor for engineering and environment at Northumbria University, said the centre would be a “game-changer for the UK space economy” and a “catalyst for the wider development of the UK space sector in the North East”.
He added: “This approval is extremely positive news for the university, the city of Newcastle and the wider North East region.”
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