Southwark councillors have approved plans by the developers and architects of the Shard to build a 26-storey tower of 148 luxury flats next door to the European Union's tallest building.
Members of Southwark Council's planning committee voted unanimously to endorse the scheme on Tuesday night.
The development is promoted by the same Anglo-Qatari consortium – fronted by Irvine Sellar and his son James – that owns the Shard.
Like the Shard and the News Building, the proposed residential tower has been designed by Renzo Piano Building Workshop.
The tower will replace the existing Fielden House on London Bridge Street (home of All Bar One ) and the red brick building on St Thomas Street which includes the Starbucks store at the corner of Joiner Street.
The council's design and conservation manager Michael Tsoukaris told the planning committee that the proposed widened pavement on St Thomas Street and flight of stairs linking London Bridge Bus Station with St Thomas Street represented a "grand gesture" in public realm terms.
He also explained that the tower had been carefully designed to preserve the view of Southwark Cathedral's tower from Southwark Bridge.
"We see this application as critical to the completion of London Bridge Quarter, which has so far provided offices, hotel, restaurant, retail and viewing gallery – all with associated employment," James Sellar told councillors.
"The proposal before you tonight will for the first time bring residents into the heart of this regeneration.
"It will create homes and bring vibrancy, ensuring that people working in London Bridge have the opportunity to live there as well."
Referring to the 2018 target date for the opening of the revamped London Bridge Station, he added: "A completed London Bridge Quarter will ensure that Renzo Piano's trilogy of buildings will welcome commuters, residents and visitors alike into a modern, world-class environment."
The scheme will not include any on-site affordable housing.
We reported last week that the developer was proposing to meet its affordable housing obligations by funding the stalled redevelopment of the Wood Dene Estate in Peckham.
Now the developer says it is considering sites closer to London Bridge, including Canada Water and other locations in SE1, SE16 and SE17, for the provision of affordable housing.
Referring to the Peckham proposal, Sellar's Emma Prichard-Selby told councillors: "We know that's not acceptable to you".
James Sellar told the meeting that his company is continuing to work with housing associations to find "a suitable site in the north of the borough" where 65 affordable homes can be built.
Sellar has an existing relationship with Notting Hill Housing in relation to its plans to redevelop the Decathlon site at Canada Water.
If the developer fails to build the required affordable housing it will be liable to make an in lieu payment to the council of £18.8 million.
Grange ward Lib Dem councillor Ben Johnson told the committee: "I think when luxury flats are built in SE1, Borough or Bermondsey the affordable housing should be on site if possible, or it should be genuinely local – which means in SE1, Borough or Bermondsey."
He welcomed Sellar's commitment to build the linked affordable housing as close to London Bridge as possible.
Work on the development is due to start in autumn 2015 with completion expected in late 2018.
Although councillors voted unanimously that planning permission should be granted, several committee members voiced concerns about aspects of the proposals.
Lib Dem Cllr Adele Morris objected to the provision of underground car parking spaces for residents of the new tower when it is so close to a public transport interchange.
Labour's Cllr Catherine Dale regretted the loss of the newsagent and independent cafe in the row of shops to be demolished in St Thomas Street, pointing out that many patients and visitors to Guy's Hospital rely on these outlets for affordable shopping in an area increasingly geared to the needs of tourists.