Manchester-based Peel Environmental was granted consent to build the £23.5m North Selby Anaerobic Digestion & Horticultural Glasshouse facility on the former North Selby Mine site in Wheldrake, Yorkshire.
The facility will recover heat and electricity from up to 60,000 tonnes of organic waste per year, generating renewable electricity to power around 3,500 homes.
The glasshouse will also use some of the heat produced and will be operated by Howden-based specialist Plant Raisers to propagate mainly tomato plants.
British Tomato Growers Association chairman Nigel Bartle said: "Yorkshire has a long and proud history of producing tomatoes, but to secure a sustainable future the industry must look to alternative energy sources.
He added: "The north Selby project is an excellent opportunity to do this, both maintaining production and jobs in the county".
The facility will provide an economic boost to the area, providing up to 256 jobs during construction and, once the site is up and running, 56 full-time positions and 50 seasonal jobs.
Peel Environmental director Myles Kitcher said: "There are significant benefits that our plans will bring to the local area and we are keen to see these delivered."
The plant will also produce up to 30,000 tonnes of digestate each year that could be used by local farmers and growers as a bio-fertiliser.