PJK Developments (Walsall) Ltd submitted plans for the construction of a new U-shaped block of apartments at Green Lane in Walsall town centre.
The highest part of the building will reach nine-and-a-half storeys in height and the plans also include a residents' lounge, small office, communal garden, cycle shelter and 68 parking spaces.
At a planning committee meeting on Thursday, councillors voted in favour of the plans and resolved to allow officers to grant permission to the scheme should conditions be met.
A legal agreement will be drawn up to ensure a contribution of £120,000 is spent on open space and off-site affordable housing, at a ratio of 75:25. A planning officer speaking at the meeting said the plans would meet the council's ambition to have a "landmark building" at the site.
Resident Jean Richmond, speaking against the application, said: "There is a school opposite this building that you are planning to build 130 apartments, with well over 200 children.
"We have about 150 parents with cars parking backwards and forwards, we have got a nursery. We really are worried about the parking in the area. It's already inadequate as it is now."
Speaking on behalf of the applicants, Ian Foden of BM3 Architects said: "The building, if approved, will be a significant addition to the town centre by virtue of its position, its design and height.
"The design has been formulated to be bold, to act as a gateway building on the edge of the town centre.
"The building will serve two different sets of customers. The majority of the flats will be exclusively for elderly people and others will be let on an open basis."
Committee member Councillor Adam Hicken, who represents Willenhall North, asked what was being done to protect the privacy of schoolchildren at the nearby St Patrick's Catholic Primary School.
Mr Foden said: "We have to have windows in habitable rooms so there will be some windows clearly overlooking the school and its playground.
"I am not sure what else we could do to provide privacy beyond that to be honest."
Councillor Hicken voted against the plans while the rest of the committee present voted in favour of the application.