The news means that construction at the site of the former coal-fired power station could start as early as next year with full commercial operation expected early in 2011.
Government ministers have imposed conditions within their planning consent to ensure that both carbon capture and heat supply plant can be retrofitted if necessary in the future.
Energy minister Malcolm Wicks said: "To secure our energy supplies, and power our homes it is important industry brings forward new energy infrastructure to maintain a diverse energy mix. In consenting to this project I felt it was important that the potential for utilising heat and capturing carbon emissions from the station is kept open, and the necessary equipment
Paul Golby, chief executive of Eon UK said: "This new station, combined with the billions of pounds we're investing in new renewables and coal developments, shows our commitment to tackling the twin challenges of ensuring security of power supply for the UK and the global threat of climate change.
Eon has plans to invest £3bn in the UK over the next three years. Earlier this year, construction started at the new gas-fired CHP station on the Isle of Grain in Kent where the supply of excess heat to the nearby LNG terminal will allow for a reduction in carbon emissions of up to 350,000 tonnes a year.