Council bosses backed the plans which will see a development on the former Faces nightclub, which has been demolished.
The project will see new four-storey Wolverhampton College buildings built on the site by 2021, when the college will leave its long-standing Paget Road site.
It forms part of a plan to make learning in the city more appealing to prospective students.
Other work will see the city’s library refurbished and extended, with a new rear entrance built.
The Alan Garner building, home to the Adult Education services, will also be revamped.
And a car park with 17 spaces will be created with access off St Georges Parade.
Former Wolverhampton Council leader Roger Lawrence said the project will be of "great benefit" to the city.
The plans were supported unanimously by councillors at a Planning Committee meeting this week.
Richard Lawrence, director for regeneration at Wolverhampton Council, hailed the move as a way to retain the city's best talent.
Mr Lawrence said: "The City Learning Quarter will transform the learning environment for our students and residents.
"We are working hard with Wolverhampton College to ensure we not only deliver a vibrant education hub where we improve the city’s learning, apprenticeship and employment offers, but also that we retain our best talent, rather than losing people to different parts of the region.
"The new facilities will provide a vital facelift to the city which is benefitting from £1 billion of investment overall.
"I have every confidence that when our plans become a reality, we will be creating an environment where everyone can flourish."