Council planner Jim Worley said the application was for 2,500sq m of new café facilities to replace existing lower quality catering. The application is with the secretary of state until the end of November to review or hand back.
Worley said: "The traffic and retail impact of the expansion was quite controversial but the council has resolved to approve it."
The approval was granted subject to stipulations — including an agreement of a landscape scheme by the developer and a supervised time scale.
Rutland County Council had expressed concerns about the scale of the development, stating it would have a "serious impact on the viability and vitality of Oakham and possibly Uppingham town centres".
Police said traffic-calming measures would need to be put into place.
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