Councillors backed the move to convert Sedgley Police Station, on Vicar Street, into nine flats, something that one resident fears will bring disruption and gridlock to the area.
Three terraced houses will also be built on the existing car park of the historic station, which went under the hammer last year for £820,000.
A statement from the planners said: "This is a full planning application for the conversion of the former police station into nine self-contained apartments and the erection of three terraced houses on the existing car park, with parking for the houses and flats at the former police station building.
"The police station has been altered and extended over the years, although it is understood that the oldest parts date from the early 19th century and that it was originally used as a workhouse, before being extended and converted to a police station."
The decision was signed off by the authority's Development Control Committee on Wednesday, with an additional condition added in respect of ensuring improved markings for the pedestrian crossing.
But a resident who lives in the town, and uses Gospel End Street and Vicar Street every day, said the parking arrangements at the site "couldn't possibly work" despite it being signed off.
They told the Express & Star said: "It should have been obvious to anyone making a site visit (if they ever did one) that the parking arrangements for that number of flats and three (houses) couldn't possibly work – and will cause chaos.
"They are expecting DPD and Amazon etc, on a busy day's deliveries, to ring up in advance for a code to the barrier, park up (if they can find a free spot) and deliver their parcels. It just won't happen. They'll slew up on the double yellow lines in Gospel End Street and Vicar Street causing maximum disruption on busy narrow roads.
"Equally they've only allowed one parking space per flat – what about second vehicles and visitors? Then add the construction of the new Aldi coming shortly in Bilston Street to the equation - and you get a perfect storm. Traffic will be gridlocked."
The resident claimed the developer had gone for "maximum profit" by building on the lower part of the police car park, before adding: "Councillors have ignored the obvious problem and let the village down."
The building, next to All Saints Parish Church, had a guide price of £260,000 with bids starting at £300,000 before the price sky-rocketed.
The station, which extends to more than 7,000 sq ft, was once the local workhouse before it was converted into a police station in the 1860s, and parts are thought to date back to the 1730s.
Police chiefs argued at the time that many of the buildings were under-occupied and the money could be better spent on frontline officers.
The station was due to close in the summer of 2019 but the last officers based there only left finally in October last year to move to Dudley Fire Station as part of a shared-premises scheme. The station had not been open to the public for some time before that.