An Bord Pleanála has granted planning permission for the proposed Poolbeg incinerator in Dublin's Ringsend.
The incinerator, which will have the capacity to burn 600,000 tonnes of waste annually, was approved subject to 13 conditions.
One of the conditions stipulates that all deliveries to the plant, except for those from a specified area around the site, will have to come via the M50 and the Dublin Port Tunnel.
The controversial plan is an integral part of Dublin City Council's waste management strategy which proposes a target of 59 per cent recycling, and the amount of waste going to landfill to be reduced from the current 70 per cent to just 16 per cent.
The plan envisages there would still be 25 per cent of Dublin's waste remaining that would be sent to the incinerator.
Minister for the Environment John Gormley, who is also a TD in the constituency, was one of more than 2,000 individuals or environmental groups who lodged objections to the application with Bord Pleanála in October 2006.
Last month Mr Gormley was accused of doing a U-turn on incineration after he said the State needed two incinerators to deal with waste that could not be recycled or processed, rather than the eight that are planned.
This evening, he insisted said his opposition was "not based on my local concerns".
Speaking on RTÉ's Six Onenews Mr Gormley said: "Obviously, I have local concerns and I live very close to where all of this traffic is going to go, but it is based on a sustainable waste plan. We need that. Frankly, I said over the last number of weeks that we have over-capacity in the system. We have to reduce that."
"I am very clear in my own mind as to what we can do now. I have to embark on a sustainable waste management plan," he said.
Mr Gormley said he would set the terms of reference for the new policy this week and hoped work would conclude within nine months.
"I consider incineration to be on the same level as landfill. The point is that if we are going to direct waste through an unsustainable waste technology, we cannot have a sustainable waste plan for this country."
He said he intended to introduce a sustainable waste management system and if this could be done, the incinerator could be made "redundant".
An Bord Pleanála has already approved a plan for an incinerator in Ringaskiddy, Co Cork and the expansion of the proposed incinerator at Duleek, Co Meath.
Welcoming today's decision, Dublin City Council said the plant would generate enough energy from the waste to provide electricity for 50,000 homes and district heating for a further 60,000 homes.
The council, last month, formally entered into a contract with its private sector partner, Dublin Waste to Energy Ltd, to construct and operate the proposed Poolbeg incinerator.
The decision by An Bord Pleanála is the first of the three statutory processes that have to be completed successfully before the project can commence.
The council is still waiting to be approved for an application to the Environmental Protection Agency (EPA) for a waste licence.
An application to the Commissioner for Energy Regulation is also required and will be made after the successful completion of the waste licence.