The wind facility with 207 wind turbines will be located north west of Walney I and II offshore wind farms, 19km west of the Cumbrian coast, 35km north west of the Lancashire coast and 31km south east of the Isle of Man.
Upon completion, the Walney Extension offshore wind farm is expected to generate enough electricity to power over half a million homes.
UK Energy and Climate Change Secretary Edward Davey said: "Another large wind farm is now closer to being built – and each one gives us more home-grown, clean and secure energy supplies."
In addition to creating 230 new jobs over the four year construction period, the wind farm will provide approximately 185 jobs annually during the expected 25 year lifespan.
The Planning Inspectorate chief executive Simon Ridley said: "It could add 207 offshore wind turbines to the existing 102 turbines of Walney 1 and 2 to generate enough to provide electricity to over half a million homes.
"The Examining Authority took full account of views from communities, particularly in the north west of England and the Isle of Man, who might be affected by this proposal, alongside national policy and evidence of the need for the project.
"The certainty of knowing when a decision will be made following full consideration of public views provides developers and investors with the confidence needed to plan the infrastructure improvements this country needs to secure its energy and future economic growth."
