The 'Twin Sails Bridge' is to be built in Holes Bay, Poole, ready for the sailing events in the 2012 Games, with construction set to start in 2008.
The announcement follows 30 years of local campaigns for an additional crossing to the existing lifting bridge, and the Government has already pledged £14.4 million towards the cost.
The Twin Sails Bridge is a bascule bridge, which the council hopes will ease traffic congestion, open up development opportunities on brownfield sites and provide increased access to the town and port.
Poole Borough Council leader Brian Leverett said: 'After decades of campaigning and planning, I am delighted the government has finally given permission for the Twin Sails Bridge to be built.
'An immense amount of work and preparation has taken place to get this far and we still have a long way to go before construction teams can move on site.
'However, we now know that the day when Poole realises its dream of a second harbour crossing is not far off, and for the first time we can put a date to when we hope to start building.