Heritage body An Taisce withdrew its appeal to a decision by Dublin City Council to grant permission for the scheme, located in the Digital Hub in Dublin 8.
Developers P Elliot & Co now have permission to build a mixed-use development of offices, cafes, restaurants and bars on the site off Thomas Street.
The plan is just one of many in the south inner city area that could transform the district in the coming years.
The project will be built in blocks of not more than eight storeys.
Part of the proposal entails refurbishing the vacant windmill, also known as the conical tower, on Watling Street to accommodate a restaurant and cafe.
The developer has pointed out there is also access from the interior of the windmill to an underground space known as the digital underground, which could accommodate cultural functions.
In its letter of objection to the city council, An Taisce had stated: "Proposed Block A is a large eight-storey structure with a deep plot running back from Thomas Street. The height of the proposed building would be equal to the eaves height of the windmill and its northern end would come in close proximity.
"We are very concerned about the impact of proposed Block A on the windmill protected structure having regard to its height and proximity. The proposed building does not retain the dominance and setting of the windmill as the centrepiece of the site."
An Taisce has yet to give a reason for withdrawing its appeal to An Bord Pleanala.
Many developments are planned for the south inner city including an expected plan for part of the Guinness factory site, which is to be put up for sale.
The 3.1 acre site is bounded by Thomas Street, James Street, Bonham Street, the IAWS building and Watling Street.