The Department of Energy and Climate Change said permission was granted to North Blyth Energy Ltd. for the construction of a biomass power station near the eastern coast.
The facility will have the capacity to produce 99.9 megawatts of energy from biomass, enough to meet the demands of nearly all of the 170,000 households in the area each year.
"Sustainably sourced biomass has an important role to play as part of a balanced energy mix, enhancing energy security and reducing greenhouse gas emissions," the DECC said in a statement.
The DECC in June said the amount of energy generated from renewable resources grew by 10 percent compared to last year, with offshore wind accounting for the lion's share of the growth.
The British government is mulling new energy and climate targets to expand on progress made on 2020 benchmarks. The company behind the biomass facility said it would offset more than 300,000 tons of carbon dioxide emissions each year.