The project was originally awarded to Dong in 2007 following a Crown Estate tender. The site was originally granted to Total Energie of France, but handed back when the company decided not to pursue offshore wind in the UK.
Dong is yet to take a decision on whether to build the project.
The decision to grant permission was announced by UK energy minister Charles Hendry and follows a series of offshore funding initiatives announced by the UK Treasury.
Five offshore development areas will receive government support, including on the Humber, Tees and Tyne. Additionally, £60 million will be made available to manufacturers over the next four years.
The move comes as prime minister David Cameron urged investment and pension funds to invest in offshore wind energy.
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