Developer MVV Environment said that up to half a million tonnes of waste will be diverted from landfill, generating over 50 megawatts of electricity and the opportunity to supply steam to local factories.
The decision also gives the green light to a series of compulsory purchase orders needed for the site at Algores Industrial Estate in Wisbech.
The development includes not just the energy from waste facility but also the connections to the electricity grid at the Walsoken Substation and industrial heat users, and some modifications to the road network.
Construction will take around three years, with 500 staff on site at peak construction.
MVV operates EfW facilities in Plymouth and Dundee, as well as a biomass facility at Ridham.