Brighton and Hove Albion FC has been given permission to build a stadium at Falmer, on the outskirts of the city.
They first applied for permission to build the ground in 2001 and have been waiting since then for a decision.
Deputy Prime Minister John Prescott ruled on Friday the 23,000-seat stadium could be built at Falmer.
Chairman Dick Knight said the club was over the moon, but campaigners against the plans said they were disappointed and believe it is the "wrong location".
Mr Knight said: "Never mind over the moon, we're over Jupiter. This is the greatest home win ever in the club's history.
"There's been a lot of hard work gone into this project over the course of the last seven years and we've really been through the mill."
Brighton have been playing home games at Withdean, an athletics stadium in the city, since 1999 and their last permanent home was sold off in 1997.
The club argued that by having to play home games at Withdean, with a capacity of 7,000, it was missing out on huge amounts of ticket revenue.
Chief executive Martin Perry said construction work should start - to the north of Village Way in Falmer - in about a year's time and it is hoped it will be ready by 2008.
Brighton fan DJ Norman Cook - aka Fatboy Slim and a director at the club - said it was the club's "salvation".
"It is a good day for all the people of Brighton who have waited eight years to have somewhere to stay and some kind of security," he told BBC Radio 1s Newsbeat.
"This is why it's a sigh of relief rather than feeling like we've won the FA Cup."
Brighton and Hove City Council has backed the scheme, as have the city's MPs.
Council leader Ken Bodfish said: "It's the most fantastic news. I'm so happy for the fans and the city."
But some Falmer residents objected strongly to having a stadium built in their village.
Neighbouring Lewes District Council said it was "surprised and disappointed" at the decision.
"I am bitterly sorry for residents of Falmer who have fought long and hard to protect their village against this inappropriate development," said council planner Neil Commin.
A summary of the decision from the Office of the Deputy Prime Minister said the stadium was in the public interest, and there are "no other realistic alternative sites".
Mr Prescott recognised there would be some harm caused to the Sussex Downs Area of Outstanding Natural Beauty.
But he said it was mitigated by factors that would see the development "carried out to high environmental standards".