The 48-image digital screen, to be fixed to the gable end of a property in London Road, was originally blocked because Town Hall bosses decreed it was too big and too obtrusive for residents living nearby.
But Clearglow, from Mawdesley, took the matter to an appeal by the Planning Inspectorate who have now decided the council was wrong.
"The appeal advertisement would not harm the character and appearance of the area, therefore it would not harm visual amenity," ruled Inspector Sarah Manchester.
The decision means Preston will now have three illuminated advert screen on busy main roads - one attached to a cafe wall on Blackpool Road, Ashton and a freestanding one at the junction of Deepdale Road and Ribbleton Lane were both given council approval.
A fourth, next to the former Neptune pub on Strand Road, was thrown out by the council last year and subsequently failed at an appeal.
The screens are designed to show up to 48 adverts, at 10 second intervals, to catch the eye of road users in prime locations in the city.
The city council used a previous planning inspector's ruling about the proposed screen on Strand Road being too obtrusive as the basis for its case against the London Road one.
But the inspector said the two cases were not alike. The one planned for the car park of the Neptune House flats was "out of scale" with the nearby building at 6m wide by 3m wide and would have resulted in an "unacceptable visual intrusion in the street scene."
But the London Road proposal, for a 4m by 2m display more than 2.6m off the ground on the gable end of a large building, would not present the same visual intrusion.
"While it would be a novel feature, the advertisement would not contribute to visual clutter, nor would it be discordant or compete with other signage," she said.
"It is not comparable (to the Strand Road case) and it does not provide justification to refuse the appeal scheme which I have considered on its individual merits."
The London Road screen will show up to 48 digital still images to passing traffic, with the brightness automatically set at acceptable limits both day and night.
The Planning Inspectorate has ruled that there should be no moving images including animation,flashing, scrolling or video elements.
Clearglow have been given permission to display the screen for five years.