Birmingham City Council's Planning Committee has green lit proposals to transform the facility into a high-quality venue for diverse sporting, leisure, community and cultural events.
These works form part of a wider £72 million plan to regenerate Perry Barr.
Initially, the stadium, at Walsall Road, Perry Barr, is set to be the focal point of the Birmingham 2022 Commonwealth Games, hosting the Opening and Closing Ceremonies as well as the athletics events during the 11-day event which features 6,500 athletes and officials from 71 nations and territories.
The redeveloped stadium would increase its permanent seating capacity from 12,700 to 18,000 allowing more than 30,000 during the Games through additional temporary seating.
Post-Games it will be at the centre of a regenerated Perry Barr, which is receiving more than £500m of investment in the coming years, which also includes new housing, improved transport and related upgrades to infrastructure and public space.
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The stadium will provide a new home for the university's sports and exercise students, as well as becoming a focal point for a range of leisure, health, wellbeing and community activities for local residents and the wider general public.
Cllr Ian Ward, Leader of Birmingham City Council, said: "We've always been clear that Birmingham 2022 is about much more than 11 days of fantastic world-class sporting action. The Games are about regeneration, improved health and wellbeing, promoting the city on a global stage and building civic pride.
"This particular scheme is integral to all of those aims and benefits – the eyes of the Commonwealth and indeed the wider world will be on the venue during the Games, but the longer-term opportunities the improved stadium will offer a regenerated Perry Barr, and indeed the wider region and nation, mean the delivery of this scheme is crucial for the city's future."
Ian Reid, Chief Executive for Birmingham 2022, added: "The Alexander Stadium is a pivotal venue for the Birmingham 2022 Commonwealth Games, as not only will it host the track and field events for athletics but it's also where we will stage our official opening and closing ceremonies for the Games.
"Today's news that planning approval has been granted is therefore a key moment for us as the organisers of the Games and one which we are pleased to be able to celebrate with our partners.
"Birmingham City Council will be delivering the new sections of the stadium and we look forward to watching progress over the next couple of years, ahead of us moving into the stadium when we deliver the Games in 2022."
Construction of the new stand will commence in spring of this year, with completion in late 2021. This will be followed by test events ahead of the Birmingham 2022 Commonwealth Games.
(CM/MH)
