Developers had bid to transform the Grade II listed building on West Cliff into 31 flats spread across five floors.
The city council’s planning committee gave its approval last week despite objections raised by the Victorian Society.
It argued changes to the 19th century frontage “would harm the significance of the building” and the addition of dormer windows would be “incongruous”.
Committee members followed recommendations that the plan represented acceptable development for a location left vacant for 15 years.
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The building once housed a Royal Mail sorting office and was identified as being at risk following a review of the Fishergate Hill conservation area in 2015.
The planning officer’s report reads: “Although the Victorian Society has objected to the application, it is considered that the proposed works would greatly improve the character and appearance of the building and its setting within the conservation area.
“It is currently in a state of disrepair and the building has been almost entirely gutted internally due to dry rot. In addition, the windows have been boarded up and railings to the front having been removed.”
The apartments will be a mixture of one, two and three bedroom properties.
A rear car park will have 36 spaces, according to planning documents.
And two types of bat boxes will be installed on site before the works start as the Greater Manchester Ecology Unit (GMEU) found the location to be a brown long-eared bat roost.
The application received a unanimous vote of approval, subject to conditions, from the planning committee.
The report added: “The proposed development would bring a vacant Grade II listed building back into active use.”