The state-of-the-art facility has been earmarked for playing fields on Londonderry Lane, Smethwick, and will feature an Olympic-sized swimming pool, a 25-metre diving pool and 5,000 spectator seats.
It will then become a leisure centre following the conclusion of the 2022 Games.
The aquatics centre plan was approved by Sandwell Council's cabinet on Wednesday. Planning permission will now be required before work can start on the centre.
It will play host swimming and diving events at the Games in four years’ time, after Birmingham was confirmed as the host city.
The centre will serve as a replacement for the outdated Smethwick Swimming Centre, also known as Thimblemill Baths, and Langley Swimming Centre.
Council bosses have promised to provide alternative football pitches to make up for land lost on Londonderry Lane.
Sandwell Council leader Steve Eling said: "There’s a lot of excitement building around the Commonwealth Games and it’s going to be fantastic for the area.
“We’re very proud to be part of it and to be hosting the swimming and diving events here in Sandwell.
"The benefits to the local economy will be huge and the eyes of the world will be on Sandwell.
“We were already looking to replace our ageing swimming centres at Langley and Smethwick, which no longer meet the needs of users – and the Commonwealth Games gives us a once-in-a-lifetime opportunity to build an even better new leisure facility to serve the local community for decades to come.”
The £60 million cost of building the new centre would be met by various organisations involved in delivering the Commonwealth Games 2022, including the Commonwealth Games Organising Committee, Sandwell Council and Black Country Local Enterprise Partnership.