Jobs hope as Terry's project approved

The long-awaited project – which was refused in 2008 amid concerns about transport and infrastructure – will include two hotels, an 80-bed care home, a business park, a children's nursery, a medical centre and a convenience store as well as homes.

The York company behind the project, Grantside Ltd, bought the 27-acre site for 26m in April 2006 and more than 2,700 jobs are expected to be created through its development.

The revamped plans saw the business park switched with the proposed residential area of the site, meaning homes will be built on the side closest to the city centre.

York Council leader Andrew Waller said: "This demonstrates without question that York is open for business.

"It is a tremendous boost for the economic future of the city, in terms of employment, housing and redevelopment."

More than 300 jobs were lost when the Terry's factory closed in September 2005 after United States parent company Kraft transferred production to Europe.

Councillors had discussed a possible bypass around the nearby Bishopthorpe village, although studies showed this would not make a difference and was not required.

Shaun Watts, president of York and North Yorkshire Chamber of Commerce said: "Development in York has suffered a series of unexpected setbacks over the past few years and so the announcement that the planning application for the Chocolate Works has been approved is great news for our city.

"This is a strategically important development for York and will play a vital role in our city's growth as we emerge from the recession."