The wind farm will feature up to 175 wind turbines to be installed about 13km to 20km away from the coast.
E.ON has secured approval from the UK Government for its Rampion offshore wind farm development off the Sussex coast.
Onshore construction is anticipated to commence in 2015 with the project planned to be completed in phases over the next four years.
The company estimates that the site may start generating power from 2018 or 2019.
The project, which will deliver enough electricity for about 450,000 homes, is estimated to create more than 750 jobs and bring over £2bn of investment into the UK’s economy.
E.ON is required make a final investment decision on the project and apply for subsidies from the government before starting building work.
Commenting on the approval, E.ON Renewables chief operating officer Michael Lewis said: “This is a key milestone for the project and we firmly believe Rampion will play an important role in helping to ensure future security of supply and make a significant contribution towards meeting the UK’s renewable energy targets.”
UK Energy and Climate Change secretary Ed Davey said: “We’re driving investment in our energy security, and our plans have made us number one in the world for investment in offshore wind energy.
“This project is great news for Sussex, providing green jobs as well as driving business opportunities right across the country in a sector with a clear roadmap for long-term growth.”