Callow's Yard in Castletown will be transformed into a residential development following a lengthy planning battle.
An objection was lodged by MHK Kate Beecroft to the original planning inspector's recommendation to go ahead - this has since been overturned.
Planning committee chairman Chris Robertshaw MHK had the final say, with the go ahead now granted to convert the two storey commercial building into a town house, and apartments.
It will see the yard's residential offering boosted from 35 to 50 units.
Approval was granted on the basis that certain conditions were met including that work begins within four years and that window installations must be sympathetic to the surrounding area.
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