The BBC Trust has given its formal approval to the Freesat service.
The Trust said Freesat would not harm the digital market
It will allow viewers to receive free-to-air channels through a satellite dish.
Currently Freeview - which is broadcast via terrestrial transmitters and aerials - is not available to about 25% of television viewers.
The project, a joint venture between the BBC and ITV, would also provide an alternative to BSkyB and cable as a way of receiving digital channels.
Freesat will, like Freeview, require a one-off payment for reception equipment.
The Trust, which oversees the BBC's work, said it had been pleased at the response to a public consultation, which had backed the project.
It said the feedback has supported the idea Freesat represented good value for money, was in the public interest and would not adversely affect the broadcasting market.
A number of conditions were imposed on the move, including that partners were in no way subsidised by the licence fee and sufficient control was retained by the BBC to guarantee public service objectives are retained.
Acting Chairman of the BBC Trust, Chitra Bharucha, said: "Envisaged as a joint venture, Freesat will ensure the public remain in control of how they access the BBC's television channels and radio networks for which they have already paid.
"It is guaranteed to remain subscription free, ensuring that the benefits of digital television do not equal 'pay television'."
The switch from analogue to digital television is due to take place, region-by-region, starting next year and concluding in 2012.