Bermondsey Community Council has resolved unanimously to grant planning permission for Linden Homes development of 38 new homes at the corner of Grange Road and Fendall Street.
The scheme, designed by KKM Architects, includes three houses, a maisonette and 34 flats. The proposal incorporates 13 affordable homes, nine of them social rented.
Addressing councillors, Robin Meakins from planning agents Barton Willmore said: "We are very excited by this scheme and think it will be an asset to the borough that you can be proud of in the future."
He acknowledged that some nearby residents "will lose some of the sunlight and daylight they currently enjoy" but that all neighbours would retain an acceptable level of light.
Grange ward councillor Mark Gettleson addressed the committee in support of the application.
"I think that the mix of homes, quality of design and rigour with which the applicant has responded to this committee's and officers' concerns is commendable," he said.
He described the existing building as a "den of squatting and loud music playing into the night".