Backed by burgeoning developers First Base, Howells' scheme, called the Printworks, will provide 164 new homes for the area, 42 per cent of which will be affordable housing.
The green light has also sparked a design competition run by local residents and Southwark Council to transform the public realm.
The competition will be partly funded through Section 106 funds and will be run in conjunction with the Architecture Foundation to produce a 'greener, safer and more accessible public space.'
First Base director Richard Powell said: 'We believe this is the first time a developer in London has worked with both residents and the council to specifically direct the use of money from the Section 106 funding, even before planning was submitted.
'We believe engaging with residents and stakeholders at every level will ensure our schemes are properly integrated into their local environment and support longer term regeneration.'