Up to one million square feet of prime retail space, plus a hotel, car park, restaurant, cinema and houses will now be built on the site of the current St James Centre between Princes Street, Leith Walk and York Place.

Plans had been held up amid concerns relating to the type of stone which will be used for the development, with the proposals to use limestone deemed at odds with the sandstone façades of neighbouring A -listed and B-listed buildings within the World Heritage Site and New Town Conservation Area.

However, the development sub-committee of the City of Edinburgh Council this week voted by nine votes to five to approve the use of limestone cladding for the development.

Developers TH Real Estate had been urged by conservationists and planners to use sandstone on keeping with much of the city centre, but experts said it would take 20 years to supply such sandstone from a UK quarry.

A report to the committee stated: “Limestone is not a material widely used in Edinburgh and in particular, the New Town. Both old and new buildings in the New Town typically use sandstone.

“The continued use of sandstone spans 250 years, from the inception of the New Town, with buildings like Register House, right through to recent developments like Multrees Walk and Harvey Nichols.

“While there are a variety of different architectural styles in the immediate location, it is the use of sandstone that provides a unifying effect.”

Planning officials noted, however, that “the applicant makes a strong case for the use of limestone” and added: “There is no doubt that limestone is a high quality material. It is used extensively in locations throughout the UK and in certain buildings in Edinburgh.”

TH Real Estate said the decision “marks a major milestone” for the development.

Subject to outstanding compulsory purchase orders being resolved, which is expected in late September, TH Real Estate said its project team is working towards a January vacant possession of the St James Centre to enable demolition works to begin onsite in early 2016 with the view to completion in 2020.

In June the council granted planning permission and listed building consent for the conversion and alterations of B-Listed St Andrew’s Hall and is “minded to grant” permission to convert the Mansion Capital building into housing and retail units within the development site.

TH Real Estate is awaiting planning permission for the scheme’s luxury hotel, which will go before council planners later in the summer, which is described as the “centrepiece of Edinburgh St James”.

Martin Perry, director of development with TH Real Estate, said: “We are absolutely delighted that the City of Edinburgh Council has backed our vision for Edinburgh St James.

“We are now focused on the next phase of our plans for this landmark development – providing Edinburgh with a brand new, vibrant and exciting place to live, visit and shop in the heart of the city.”