Sedgemore District Council has approved the Bristol Water scheme which now needs regulatory backing from regulator Ofwat to proceed.
Bristol Water said: “We believe that the £125m reservoir, if built, will provide a much needed new source of water in Somerset – as well as being of enormous long term recreational and conservation benefit.
“However, there is still a long way to go before any construction, as the investment must also secure regulatory approval from Ofwat.”