Planners at Dudley Council have given the go-ahead for Ranco Estates to convert the building in Worcester Street into seven apartments – with five being two bedroom and two one bedroom flats.
In their application, they said the surgery closed in 2014 and approval was granted to turn it into offices. But the development never materialised and the property has lain empty for the past seven years.
Concerns about traffic causing more problems in the surrounding area were raised by a neighbour, who objected to the application.
They said: "Seven apartments potentially adds 14 residents if assumed to be couples for maximum capacity. This in turn could potentially result in 14 extra cars to be parked if assumed that everyone has their own car (very few couples these days share one car).
"Where are these to be parked on an already busy road which is congested twice a day with school traffic. Residents on Hill Street rarely are able to park near their own houses at present. This extra number of potential residents to the area is ultimately going to make Hill Street congested and ultimately dangerous."
But officers said the development would not have a negative impact on traffic in the area and would instead be a boost for the area and granted approval.
Planning officer Catherine Golightly said: "The development would provide new housing to help meet the borough’s demand for new homes.
"The proposed type and tenure’ layout and design are appropriate for the area and can be accommodated without any significant adverse impact on existing residents, or the local highway network.
"The proposals would provide a good quality development, which is considered would make a positive contribution to the area and which constitutes sustainable development."