The US embassy in Mayfair will be put up for sale almost immediately
Wandsworth Council has granted outline planning permission for a new US embassy at Nine Elms.
The site covers five acres on the south side of Nine Elms Lane and the building will be up to 20 storeys high.
The design will be chosen in a contest for US architects. Some 800 people will work in the building.
The council's planning applications chairman Leslie McDonnell said the scheme "promises to kick-start wider regeneration of the area".
He added: "We are delighted this scheme is moving forward."
The outline permission is subject to detailed negotiations on contributions to the cost of local and strategic transport improvements.
This would include funding towards Crossrail or the council's preferred alternative of a Northern Line extension from Kennington. This could include a station at Wandsworth Road.
The embassy will be in the centre of the site and set back 30 metres from its boundaries.
The building's height has still to be determined but will be in the region of 15 to 20 storeys. The final design will have to preserve existing views of the Palace of Westminster.
Other improvements include a new pedestrian and cycle link between Wandsworth Road and Nine Elms Lane, improvements to the riverside walk and a new park location which could take the form of a green chain running through the site from Vauxhall to other new developments in the area.
The full schedule of improvements will also have to be approved by Transport for London and the Mayor of London.
The current embassy, which has been in Grosvenor Square, Mayfair, for more than 40 years, is the largest such US institution in western Europe and one of London's most recognisable buildings.
It has been the scene of many demonstrations over the years and since 9/11 has been heavily fortified.