Ed Davey, secretary of state for energy and climate change, gave consent for the project to go ahead after the Planning Inspectorate made its recommendations.
Onshore construction for the project is set to begin in November, with offshore operations starting in 2016. A commissioning date has been set for 2017.
Danish developer Dong will now need to make a final investment decision on the project.
The extension will use 32 MHI Vestas V164-8MW turbines to work alongside the existing 90MW Burbo Bank project off the Liverpool coast, north-west England.
Burbo Bank, also developed by Dong, has been in operation since 2007. It uses 25 Siemens 3.6MW turbines.
The extension was one of five offshore projects to secure a contract for difference from the UK government under its new subsidy scheme in April.