A planning inspector has given the green light for the partial of early 20th century workshops between Glasshill Street and King's Bench Street.
In March the former Borough & Bankside Community Council voted unanimously to veto the demolition of the buildings which are used as artists' studios as well as accommodating the Alma Enterprises gallery.
Permission to redevelop the site with eight homes – whilst retaining the facades of the current buildings – was granted in 2008 but the subsequent creation of the King's Bench conservation area meant that Deco Design & Build had to seek separate consent for the demolition of the existing structures.
When councillors refused permission, the developer lodged an appeal and planning inspector Lloyd Rodgers conducted a hearing in September.
The official notice of Mr Rodgers' decision to allow the appeal was published this week.
The inspector acknowledged that the proposed demolition would "cause some harm to the character of the conservation area".
"Even though this harm would not be substantial there would nevertheless be some conflict with [council policy]", he wrote.
However, he accepted the developer's argument that more modest changes to the building would be unlikely to be viable.
"It would be difficult to justify the cost of the repairs and maintenance required to secure the long-term health of the building," said Mr Rodgers.
He concluded: "The redevelopment of the site would deliver both commercial and residential units in a highly sustainable location. In consequence it would bring with it both economic and social benefits in line with the Government's aims to secure economic growth and employment.
"It would also bring increased activity to the area thereby improving natural surveillance to the overall benefit of the public realm."
For the latest local news and events direct to your inbox every Monday, you need our weekly email newsletter SE1 Direct.
7,000+ locals read it every week. Can you afford to miss out?
Read the latest issue before signing up