The £90m proposal - a retail-led mixed-use development for Land Securities - faced fierce opposition from the neighbouring Edinburgh City Council.
Planners in the Scottish capital claimed that the scheme would damage the city centre by drawing away shopping crowds.
But the executive government has dismissed this objection and has handed the application back to West Lothian Council, which has always backed the proposals.
The decision now paves the way for the Almondvale Shopping Centre to be extended, a scheme that will include an additional 2,300m 2of leisure space and 23,000m 2of new retail space.
Dominic O'Rourke, development manager of Land Securities, said he was pleased with the decision. 'The plans have sparked a lively debate about out-of-town retailing since they were announced in September this year,' he said.
'The Scottish Executive has given a firm steer that new retail developments should take place in existing town centres and this is exactly the route that our proposals follow.
'The speed of the Executive's decision shows that it is self-evidently policy-compliant at every level,' he added.