Despite officers recommending refusal, Walsall Council’s planning committee gave the thumbs up for the 53-apartment block to be built on the site in Queslett Road.
Members said there were "very special circumstances" to allow the development to take place on green belt land.
The meeting, held on July 23, heard the area had once housed a busy petrol station but had been vacant since 2004, while previous schemes to bring it back into use had not materialised.
Representatives for applicants Queslett Road Limited said there was a need for this accommodation in the area.
They were backed by Councillor Adrian Andrew, who represents the neighbouring Pheasey ward, who added 300 people had signed a petition calling for the site to be redeveloped.
But the plans also attracted strong opposition from Friends of the Earth and residents who were concerned about the impact the large development would have on the green belt area in which it sits.
Planning officers agreed, saying it would have a huge negative effect on the area as well as concerns over issues such as highways safety and impact on existing local facilities such as medical centres and schools.
Jane Lishman, who owns land next to the site, spoke against the proposal at the meeting. She said the plans included pruning trees on her land which she had not granted permission for the developers to do.
But Michael Robson, from agents Cerda Planning, said he believed an agreement had been reached with neighbours.
He added the applicants had also offered to fulfil a section 106 agreement that would see them contribute £100,000 towards affordable housing and open space facilities in the borough.
He said: “This site has been vacant for 16 years. There is a demonstrable need for this type of accommodation for older persons.”
Councillor Andrew said: “I’ve been campaigning for over 55s accommodation in my ward for a very long time now.
“There is an elderly population in this particular area and there is nowhere for people to downsize.
“We’ve had many iterations of proposals on this site including a drive through cleaners and drive through restaurants which would have created much more traffic movement.”
Members said the special circumstances to allow the development were that it was a previously developed site, there was a local need, it would benefit residents in both Streetly and Pheasey, it is a redundant site in the green belt while the previous petrol station use generated more traffic.
It will now be referred to the Secretary of State as the development is a departure from the green belt.