Walsall Council's planning committee voted in favour of the plans for a six-caravan site at land off Narrow Lane in Pleck at a meeting on Thursday night.
The site would be in place for a three-year period and operated through a booking system while plans include a new access point to the corner plot at Darlaston Road.
As it stands, the committee has allowed officers to grant permission to the scheme should there be no objections to a new consultation on drainage and refuse.
But the Secretary of State at the Ministry of Housing, Communities and Local Government could step in and challenge the decision, the meeting heard.
The site was selected by Walsall Council’s Cabinet at a meeting in February but has been objected to by more than 1,800 residents along with ward councillors and Walsall South MP Valerie Vaz.
The meeting heard members of the committee had received a letter from Ms Vaz opposing the plans – and that Ms Vaz had written to the Secretary of State asking for any decision to be called in.
The plans have also been supported by residents who held a celebration at the site in April for International Roma Day to show solidarity with the gypsy, Roma and traveller (GRT) communities.
Councillor Naheed Gultasib, who represents Pleck and spoke against the development, said: "The community of Pleck are wholly against the planning proposal for the site on Narrow Lane.
"The crux of the argument is that the site is not fit for purpose due to its size. Six pitches is not sufficient in dealing with the unauthorised encampments that have occurred over the last few years in Walsall. There’s going to be an overflow and the residents are going to have to deal with the overflow."
Councillor Khizar Hussain, who also opposes the plans and represents Pleck, said: "We are not against the GRT community.
"We agree there needs to be a site located for them – a suitable site, an appropriate site. Our argument today is not about any discrimination against the GRT community – it’s against the suitability of this location."
He said reasons why it is being opposed include air quality, pollution and people’s health and wellbeing and said the consultation into the plans was “really inadequate and poor”.
Paul Gordon, of Walsall Council and representing the applicant, said: “The site was recognised as positive by representatives of the GRT communities.
“The design was done in consultation with the GRT community. It’s a helpful and appropriate tool when managing unauthorised encampments and a transit site is the right thing to do.
“We do need a transit site in Walsall. We do have responsibilities under the Equalities Act and under the Human Rights Act to provide a facility.
“The location of Narrow Lane is absolutely suitable for a transit site and we are doing a lot of work in the community who understandably are nervous about some the elements of the GRT community.
“We will work with them in the same way we work with communities to make sure that Walsall is a place that welcomes people who respect Walsall and want to be here.
“In my view this will be a massive step in terms of improving the relationship between the GRT community and the existing communities of Walsall.”
The meeting heard the council “do not expect more than six caravans” at the site but any additional vehicles arriving when the site was full would be dealt with by police under existing legislation.
Speaking before the vote, council leader and planning committee chair Councillor Mike Bird said: “We have had confirmation from the Secretary of State’s office that whatever decision is made this evening, we will not issue that position or indeed that application decision until such time that the office of the Secretary of State have decided whether or not they wish to intervene.”