The bid for 5 to 13 Market Street – close to the new Market Hall – was submitted last year but was given a stamp of approval last week.
The plans will see demolition of existing rear extensions, a fresh four storey extension will be built.
Design statements submitted by 1618 Architects read: “Preston has big regeneration plans in the forthcoming future.
“In order to increase population within the city centre, the council plans to add more residential facilities to the town’s core, thus leading to the need and regeneration of services, facilities and transport links.
“The regeneration aims to contribute to Preston’s sustainable economic growth.”
The plans have been approved subject to several conditions with officers highlighting the project will bring vacant premises into use.
A report reads: “The existing building is an attractive 19th century building, however the ground floor street frontage has suffered some deterioration although not to a state of dilapidation.
"The building is prominent and widely visible in the Market Square conservation area therefore its re-use would add vitality to this part of Market Street.”