Councillors have approved plans to knock down the derelict Valentine pub at the corner of Long Lane and Weston Street and replace it with a block of flats.
Bermondsey Community Council last week resolved unanimously to grant planning permission for North Star 2000 Group's proposed development of 13 homes in a six-storey brick building.
The scheme, designed by Fereday Pollard architects, includes retail, restaurant or bar space on the ground floor and basement levels.
"The height of the building is considered to be an appropriate response to the site's corner location," said planning officer Amy Lester.
Mark Gibney, planning consultant for the developers, told councillors: "The scheme really reflects the scale of Tangerine House and other developments on corners along Long Lane."
The planning application does not incorporate the adjacent former Borough & Bankside housing office which is expected to be redeveloped separately.