Work on the redevelopment of the Shell Centre on the South Bank will start in the 'near future' after the Court of Appeal decided that objectors were not treated unfairly by a planning inspector.
A challenge to the process was brought by local resident George Turner.
In February Mr Justice Collins ruled that although the 2013 planning inquiry into the redevelopment plans had been "seriously mismanaged", the process had not been sufficiently unfair to warrant quashing the decision to approve the scheme.
Mr Turner then took the case to the Court of Appeal where judgment was handed down on Thursday.
"The three judges of the Court of Appeal have decided that there was no apparent bias on the behalf of the planning inspector who recommended approval for the scheme," wrote George Turner on his 'Battle for Waterloo' blog.
"This clears the way for Shell to start demolition.
"This is of course devastating news for all of us who believe that London desperately needs a better, fairer and more inclusive planning system based on the rule of law.
"From day one of my involvement in the Shell Centre case I knew we were facing an uphill struggle. The developers, Europe's largest company, Shell, together with the Qatari Royal Family and property giant Canary Wharf Group had limitless resources to dedicate to their campaign.
"We were a small group who cared passionately about the area and wanted a development that met local need and respected the historic and natural environment."
Braeburn Estates, the joint venture between developers Canary Wharf Group plc and Qatari Diar, intends to demolish all the buildings at the Shell Centre apart from the main tower and build nearly 900 homes on the site, as well as new offices and shops.
In a statement, Braeburn Estates said: "We are pleased that the appeal against our proposed redevelopment of the Shell Centre has been dismissed.
"It had already been through an exhaustive planning process and we now look forward to commencing works on site in the near future and, in so doing, to bringing many benefits and much regeneration to this important part of London."
Lambeth Council leader Cllr Lib Peck said: "This is great news and I do hope finally brings an end to the costly delays and uncertainty that has delayed this important development.
"This is great news and I do hope finally brings an end to the costly delays and uncertainty that has delayed this important development.
"This redevelopment scheme will be a catalyst for the regeneration of Waterloo, creating thousands of jobs and homes.
"It has already been subject to a thorough and rigorous planning process including a year-long public consultation, approval by Lambeth Council and the Mayor of London.
"A subsequent public inquiry led to the secretary of state deciding to grant planning permission in accordance with the inspector's recommendations."
Mr Turner has launched a crowdfunding appeal to raise £7,000 to cover the cost of his failed legal challenge.