Blueprints for a 32-storey residential tower also include renovating the Grade II-Listed Midland Mills building which sits on the same site in Silver Street.
A total of 300 flats are being proposed, to be split across the tower and refurbished mill site.
Councillors on the panel today (Thursday) agreed that it would be appropriate to bring the plans forward.
It comes despite comments from heritage organisations, who raised concerns about the scale of the tower, and the impact it would have on its surroundings.
Coun Colin Campbell (Lib Dem) said: “Midland Mills is a really interesting building. It does represent that very early Victorian phase of industrialisation in Leeds. In principle it’s something we ought to hang on to as best we can.
“The Victorian Society have made some strong reservations. Their points are valid and we need to address them. I’ve thought about it long and hard, and if you say ‘no’ to the development on the site, what will happen to the mill?
“I feel like a lot of these buildings have stayed up by force of habit rather than structure. There are elements of it that are not as robust as they once were.”
“By proposing a tower, we are allowing the mills to be preserved.”
The plans would be split between 22 flats in the existing Midland Mills building, and the remaining 284 in the newly-built Midland Tower. The complex would also include a communal gym, resident’s lounge and cinema room for the occupants.
However, one councillor had issues with the white glass top of the tower’s design.
Coun Dan Cohen (Con) asked: “What is the thought process on the white thing sticking out of the top?”
A spokesman for the applicants responded: “We wanted to make a modern building that was rooted in its history and would come forward as a Leeds landmark.
“The idea was to create a building that was definitely Leeds and definitely modern and to create something exciting.”
Coun Cohen replied: “Overall I think it’s a good development but the thing at the top looks horrendous. It may be the icing on the cake but I think it looks very, very curious – and not in a good way.”
Coun David Blackburn said: “I think it’s a fine proposed development. I don’t agree with [Coun Cohen] on the second bit.
“I hope we go ahead with it. My concern is that we need to get the mill developed, and not just have the tower there. If we don’t get the mill done, we’ll never get it done.
“I am very happy with that and I think it is very good.”
Panel members agreed to approve the plans in principle and delegate details to council officers.
Chairing the meeting Coun James McKenna said: “It saves a very important historic mill, and we are happy with the scheme.”