Plans by Great Portland Estates to build a 20-storey office block near the junction of Blackfriars Road and Southwark Street were approved unanimously by Southwark's planning committee on Tuesday night.
Earlier this month the planning committee deferred a decision on the application amid concerns about the level of section 106 payments proposed by the developer.
Section 106 contributions are intended to mitigate the effects of large developments on the local environment and public services.
Since the last meeting Great Portland Estates has agreed an extra contribution of £200,000.
Neil Thompson from GPE told the committee that the company had "recalibrated one or two matters" and had been able to make the additional offer so that "everybody is getting something out of this deal".
Councillors thanked both Great Portland Estates and Southwark's planning officers for their work on the negotiations.
The building, designed by Allford Hall Monaghan Morris, is a revised version of a scheme which received permission in 2007. The buildings on the site were demolished but the empty plot has remained dormant for three years.
"The scheme could generate confidence to unlock some of the stalled schemes at the northern end of Blackfriars Road which together would create a cluster of tall buildings signifying the extension of the City into Southwark," said planning officer Yvonne Lewis.
This week reports have appeared in the trade press that Beetham is hoping to buy back the site of its proposed 52-storey tower at the corner of Blackfriars Road and Stamford Street from administrators.
When completed, the 240 Blackfriars Road development is expected to accommodate between 1,500 and 2,000 office workers.
"This is absolutely in line with the vision for the regeneration of that particular part of the borough," said Cllr Nick Stanton.
"I think somebody once said that if you want to get the Elephant & Castle regeneration right, then connecting the Elephant to the City up Blackfriars Road has to be integral to that.
"We would hope to see an early implementation of this scheme. We have a number of consented schemes there which for one reason or another seem to have stalled.
"As a signal to the world that we are serious about it, it would be really good if this kind of thing did go forward."