The York Brewery Warehouse site in The Crescent will make way for a redevelopment which could bring 300 jobs to the area after councillors gave the go-ahead.
Planning officers admitted demolishing the “unusual survivor” from 1870 would be “denuding the area of a valuable and distinctive example of surviving industrial heritage”.
But officers said the plans were “on balance considered acceptable given the quality of the proposed replacement”.
The office building will be five storeys high and the malthouse facade will be maintained.
According to the officer’s report: “Accessible, high quality office space in, or near, the centre of York is rare but desirable, and a development such as this would encourage inward investment in the city, as well as providing opportunities for existing businesses to expand, new business start ups and jobs for local people.”
The site is next door to community music venue The Crescent.
Venue manager Harkirit Boparai told councillors: “I am very concerned about what the impact of having such a massive-scale building site next to our building will be when work is going on throughout the day.
“If we have a folk musician and they are pile drilling next door, that is going to significantly impact our business and viability.”
He added that the proposed design was “absolutely out of character with the rest of the street”.
Councillor Jonny Crawshaw said: “I do have significant concerns about the area more generally losing some of what made it what it was in terms of its railway history.
“The malthouse building is actually quite a beautiful building which I would be very sad to see demolished.”
He called for extra protections for the music venue so future residents of the new development can’t complain about noise.
Proposing councillors approve the development, councillor John Galvin said: “I’ve a sneaking feeling that someone’s heard that possibly – with a small ‘p’ – that the railway headquarters is going to move to York and this seems to me ready made for them.”