Edinburgh Academicals, the second oldest club in the UK, will build the £8 million facility on the site of the first ever international rugby match in Stockbridge early next year.
It said the development will secure a future for the club and allow it to continue its community rugby scheme, which offers training to four high schools in the north of the capital which do not teach the sport.
The bid had been staunchly opposed by the local community and businesses who fear the size of the structure and the nine new retail units attached will radically alter the area. Stockbridge and Inverleith Community Council had collected about 3,300 signatures against the plans in recent months and said 34 traders opposed the move.
Artists’ impressions of the stadium show a tall stone and glass structure just under the height of the Victorian tenements opposite, with retail units running along Comely Bank Road.
On the other side of the structure, facing Inverleith Park, there is seating for 2,500 fans and standing room for a further 2,500.
The stadium will contain conference facilities and a rugby museum, backed by former Scotland internationals Andy Irvine and Scott Hastings, along with VisitScotland.
Edinburgh City Council officials had recommended the scheme be approved but councillors made the final decision at the City Chambers yesterday.
Lesley Hinds, a former Lord Provost and local councillor, had earlier described it as “detrimental to Stockbridge, detrimental to the community and detrimental to businesses”.
Councillors voted 10 to 2 in favour of the development. Afterwards, opponents spoke of their dismay at the decision. Pam Barnes, chairwoman of Stockbridge and Inverleith Community Council, said that smaller independent traders would suffer with the new retail stores.
She said: “Retail has big problems anyway but how can they put a shopping mall beside a little row of shops and think it won’t have an effect.”
Gregan Crawford, another community council member, said the development was, in many ways, “a shopping mall with a stadium attachment”.
Edinburgh Accies have insisted the development would secure the club’s future, boost the local economy and create nearly 100 full-time equivalent jobs.
The club’s ground at Raeburn Place, dubbed “the cradle of rugby football in Scotland”, staged the international match between Scotland and England in 1871.