The site - in the heart of one of the most sensitive city centres in Europe - has previously been subject to two bitter planning inquiries, which pitted Land Securities and its architect Chapman Taylor against CABE and some extremely well-organised local opposition.
It is understood that Land Securities has taken the decision to stick with Chapman Taylor despite the failure of the practice's two previous iterations.
The council's decision to approve the fresh planning brief will open the gates for the developer to have yet another go at building a shopping centre on the site.
Local government officials said they were delighted that a deal had been agreed for the site's brief.
CABE, York Civic Trust and local campaigners in the Castle Area Campaign (CAC), will now be invited to engage in a masterplanning process, based on the new brief.
But in a statement, CAC, which has staunchly opposed all previous attempts at building on the site, said it was unimpressed.
'CAC is in no way satisfied with this planning brief,' the statement says. 'It is still calling for a big shopping mall. However, the protesters and some councillors have won a few points today. There is still much to do - so keep watching.'