The £100 million development is to be built by I&H Brown, a Perth-based firm, which aims to start working on the 62 hectares of agricultural land between Parkneuk and Wellwood later this year.
Conditional approval pending on a legal agreement was given by West Fife planning committee, even with concerns being raised over such a major development taking place on top of mining land.
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1,100 homes including 275 affordable houses are included in the plans, along with a new primary school, an urban park, a neighbourhood centre, employment land as well as a path and cycle network.
One year ago, the Coal Authority fenced off the area to the pubic after the appearance of a sinkhole up to four metres wide appeared overnight. The developer however confirmed the arrival of the sinkhole would not deter its ambitions.
A mine risk assessment was carried out, with the report finding coal seams across the site at shallow, moderate and greater depth. 22 mine entries were also discovered, with only 2 of them having been treated.
In response to public consultation, the Coal Authority said: "Although all the correct risks have been identified, the applicant has not set out clear conclusions or a mitigation strategy for determining whether or not the development can proceed"
Transport Scotland had no objections to the development, but said it was essential junction improvement works at Pitreavie roundabout on the M90 motorway were successfully carried out.
(LM/CD)
