The scheme is set to become the world's first tidal lagoon energy initiative and can now begin development of the 240MW project.
The Planning Inspectorate's Chief Executive, Simon Ridley, said: "This was the first tidal lagoon project to be examined by The Planning Inspectorate and a Panel of 5 Examining Inspectors was appointed.
"The examination, recommendation and decision have been within the statutory timescales laid down in the Planning Act 2008.
"The Planning Inspectorate is committed to giving local communities the opportunity of being involved in the examination of projects that may affect them."
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Mr Ridley added the local authority and public were able to participate in the six month planning examination.
Mark Shorrock, Chief Executive of Tidal Lagoon Swansea, said: "Wales led the way providing the fuel for the industrial revolution. We are now entering the era of the climate change revolution – de-carbonising our world in time to avoid two degrees of global warming – Wales can now lead this next revolution.
"With the Swansea Bay Tidal Lagoon becoming a reality, locking in 120 year life, zero carbon energy infrastructure, we have the potential to help transform our industrial economy and the UK’s energy mix."
However, negotiations over the fixed price at which the energy will be sold are continuing between the developer and the DECC.
Mr Shorrock added: "We now have some further permissions to secure and must successfully conclude CFD negotiations on our way to financial close, but the vision is now closer to reality than ever before and our delivery team is readying itself to start on site and start delivering for Swansea Bay next spring."
(LM/MH)
