Hammersmith and Fulham Council's planning committee voted unanimously to approve the proposal for a 60,000-seat stadium.
Hammersmith and Fulham Council's planning committee voted unanimously to approve the proposal for a 60,000-seat stadium, which would reportedly cost around £500 million ($610 million, 576 million euros).
"More than a year ago, a planning application for a new stadium at Stamford Bridge with an expanded seating capacity was submitted to our local council, Hammersmith & Fulham," a statement on Chelsea's website confirmed.
"Over the past 12 months, we have consulted widely with neighbouring residents, local businesses, statutory authorities and continued to work closely with the council.
"Tonight the council's planning committee considered the application and we are grateful that planning permission was granted for the redevelopment of our historic home.
"The committee decision does not mean that work can begin on site. This is just the latest step, although a significant one, that we have to take before we can commence work, including obtaining various other permissions."
Chelsea have long struggled to find a way to expand their west London stadium, which holds 41,000 fans, to ensure they can compete with the larger match-day revenues of their rivals Manchester United, Arsenal and Liverpool, who all have bigger grounds.
Blues owner Roman Abramovich looked at moving Chelsea to several other sites around the capital, but eventually settled on improving their historic home, which opened in 1877.
Chelsea currently have the seventh biggest ground in the Premier League and the third biggest in London, behind Arsenal and West Ham.
Tottenham will also move ahead of Chelsea when the new White Hart Lane is completed in 2018.
It is estimated however, that with the new Stamford Bridge, Chelsea could match Arsenal's current matchday turnover of £100 million a year.
The news was welcomed by Chelsea Pitch Owners, the group which owns the freehold to the land on which the stadium sits.
A statement said: "The board of Chelsea Pitch Owners welcomes the London Borough of Hammersmith and Fulham's approval of the planning application for the redevelopment of Stamford Bridge.
"We believe the plans will provide a world-class stadium and the bold architectural design will enhance the local area.
"As a supporter-based organisation and owner of the freehold of the land on which the current stadium lies - a role that is unique among the leading clubs in England - CPO was set up to ensure the club remains at the Bridge, its home since 1905.
"That goal looks more secure than it has for many years following the planning approval. We look forward to continued co-operation with the club on this exciting project."