The Hepworth Gallery, which is scheduled to open in 2008, forms part of the planned transformation of Wakefield's River Calder waterfront at the southern gateway to the city.
However, it also received a hammer blow this week with news that the Heritage Lottery Fund (HLF) trustees have decided not to award a grant of £7 million towards the £23 million project.
During the planning process the design was praised by CABE for its 'strong volumetric forms' of the design and the 'chasms of natural light in the gallery spaces'.
Council leader Peter Box said he was delighted the scheme had won the planning green light. 'The detailed planning permission is a major step forward for the Hepworth Gallery, which is a key part of the urban renaissance vision for the city and transformation of Wakefield's historic waterfront,' he said.
'We are disappointed and surprised that the HLF's trustees chose not to support this project, which is so important for the people of Wakefield.
'The project has already received a grant of £5 million from the Arts Council England in 2004 and we shall be making appropriate representations to the HLF with a view to the bid being reconsidered later in the year,' Box added.