The centre is expected to open in Flood Street in 2021 and will include a 25 metre swimming pool, gym and sports hall.
Plans for a new leisure centre in Dudley town centre were first revealed two years ago and were backed by Dudley Council's cabinet in March last year.
Work was initially planned to start in April but the project was pushed back when planners were ordered to "enhance" the initial designs.
The authority's planning committee finally gave the stamp of approval at their meeting on Wednesday night – with enabling works expected to start early next year.
As well as the new Dudley Leisure Centre, the £31 million leisure programme will also see Stourbridge's Crystal and Halesowen leisure centres refurbished in the coming years.
Dudley Council will borrow to fund the investment which is costing £7m more than was originally budgeted.
The authority's deputy chief executive, Alan Lunt, has welcomed the planning approval – adding it will enhance Dudley town centre's offer to residents and visitors.
He said: "The Dudley Leisure Centre proposals have now been through the full planning process and we are looking forward to works getting underway early in the new year.
"This fantastic new centre will enhance the town centre offer and plays a part in Dudley’s regeneration."
Dudley Council leader Councillor Patrick Harley added: "This planning approval shows that this administration is getting on with the regeneration of Dudley town centre.
"This will be a great facility for the people of Dudley and future generations."
The two-storey leisure centre will also include flexible studio and meeting spaces, spin studio, adventure soft play and an on-site cafe.
The plans for the leisure centre are part of a wider major regeneration programme bringing more than £1 billion investment to Dudley town centre.
The existing Dudley Leisure Centre in Wellington Road, will remain open while the new centre is built.
It is not yet known what will happen to the current centre when the new one opens.