The practice's original proposal for a 38-storey skyscraper scheme on wasteland behind the city's Central Station was met with a wall of criticism from English Heritage (EH) when it was unveiled last year.
However, a revised scheme, which features a substantially shorter main tower ( pictured above right, with original proposal to the left), has now been approved by Liverpool's planning committee.
It is understood Woods Bagot lopped around 10 storeys off the top of its initial designs to appease a clutch of disgruntled heritage bodies, which had branded the £160 million project 'overly dominant' ( Woods Bagot shrinks Liverpool tower in face of fierce opposition).
EH had raised concerns about the potential impact on the nearby Ropewalks Conservation Area and also on the views of the city's two cathedrals.
The council's decision was given a muted welcome by Downtown Liverpool in Business chief Frank McKenna, who admitted he was a fan of Woods Bagot's initial proposal.
He said: 'It comes to something when you are pleased with second best and clearly that's what this is.
'The first scheme was far superior and the people of Liverpool have been robbed of another potentially iconic scheme.'
The new scheme, nicknamed Spencer and Kate after screen legends Spencer Tracy and Katherine Hepburn, will now include a 20-storey mid-rise block next to the central tower as well as two other nine-storey buildings.
Work is expected to start on the first phase of the 55,000m 2mixed-use housing, leisure and retail development early next year.