The Hinkley C £18bn nuclear power station will go ahead with new national security safeguards, although critics have dismissed the new measures as "window dressing".
The French and Chinese governments have agreed to proceed with the project with additional conditions.
The decision was delayed by Theresa May's new government in July, who wanted to look again at the project inherited from the previous administration.
Under the new agreement the government will be able to prevent the sale of French power firm EDF's controlling stake prior to the completion of the ten-year project, without the prior notification and agreement of ministers.
After the power station is built the government will take a special share in all future nuclear new build projects. This will ensure that significant stakes cannot be sold without the government's knowledge or consent.
The government will also direct UK watchdog, the Office for Nuclear Regulation (ONR), to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership. The government said will allow ONR "to take action to protect national security as a result of a change in ownership".
But Barry Gardiner, the shadow energy secretary, claimed that the government already had powers to halt the sale of any element of the UK's critical infrastructure and dismissed the new measures as "window dressing".
Gardiner added the government "claimed they introduced significant new safeguards into this package. The secretary of state already has such powers."
John Sauven, the Greenpeace executive director, also said the government's review "appears to have been a lot of hot air".
But Secretary of State for Business, Energy and Industrial Strategy Greg Clark said: "Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government's agreement."
"Consequently, we have decided to proceed with the first new nuclear power station for a generation."
A spokeswoman added: "There will also be reforms to the government's approach to the ownership and control of critical national infrastructure and other strategic sectors to ensure that the full implications of foreign ownership are scrutinised for the purposes of national security."
France's EDF has agreed to pay for two-thirds of the project, with China paying one-third as well as using its designs for additional power stations.
'Good news for British consumers'
EDF Energy chief executive Vincent de Rivaz said: "Today's announcement is good news for British consumers and gives a huge boost to British industry. We remain fully aligned with the British government."
Hinkley Point C will provide 7% of Britain's electricity needs for sixty years. The project is expected to create 26,000 jobs and apprenticeships.
The government has agreed to a guarantee of £92.50 per megawatt hour of electricity generated for around half the life of the power station.
Workers are 'shovel ready'
Unite national officer for energy Kevin Coyne said: "Our members are shovel ready and dead keen to start work on the country's first nuclear power station for a generation. It is excellent news that that the uncertainty caused by Theresa May's decision to put Hinkley Point 'on hold' has now been dispelled and that the Government recognises the role of nuclear in a mixed energy economy."
A state-backed Chinese firm has a third stake in Hinkley and is pressing to build other new nuclear power stations in the UK, including Bradwell in Essex.
CBI Deputy Director-General Josh Hardie said: "The final green light for Hinkley Point is good news for the UK's energy future as well as supporting jobs and growth across the South West and the country."
"Investors are hungry for further signs from the Government that the UK is open for business."
DO WE NEED HINKLEY POINT C, AND WHY HAVE THERE BEEN SO MANY DELAYS?
Plans for the first new nuclear power station in a generation in the UK have finally been given the go-ahead by the UK Government, after an unexpected delay in the summer.
:: Why has Hinkley Point C been beset by delays?
There have been issues with financing the £18bn project by EDF, which seemed to have been finally solved when the French government, which owns 85% of EDF, provided fresh financial backing.
French unions have raised doubts about Hinkley, and problems with two nuclear plants under construction in France and Finland have also had an impact on the project.
:: Why did the Government delay?
Concerns had grown about the cost to consumers who will be locked into paying subsidies of £92.50 per megawatt hour of power generated for 35 years, which experts have estimated could cost close to £30 billion on energy bills over that time.
There were also security concerns about the role of the Chinese in the UK's nuclear power provision, particularly in its plans to design and build a reactor at Bradwell in Essex.
:: But don't we need Hinkley Point to keep the lights on?
The argument for Hinkley, and indeed a whole fleet of new nuclear power plants which the Somerset plant was supposed to herald, is that nuclear power is needed to keep the lights on at the same time as cutting carbon emissions to tackle climate change.
It would provide predictable base-load power, and is one of the lowest-carbon electricity sources available.
A number of coal-fired power plants and nuclear reactors have closed in recent years and the Government has pledged to phase out polluting coal by 2025. Nuclear currently supplies 20% of our electricity but most reactors will have closed by 2030.
:: So we do need Hinkley Point?
Concerns have been raised that the energy landscape has changed in the last few years, since the deal was first backed and the contract negotiated.
Renewables are much more mainstream and the costs of subsidising solar, onshore and offshore wind have fallen dramatically.
And the way the energy system is managed, with more balancing of supply and demand and growing use of storage, may mean a large chunk of base-load power running all the time - as nuclear would - is not needed.
:: What have the Chinese said about the Government's go-ahead?
The Chinese state-owned company CGN welcomed the move and said it would now be able to deliver nuclear capacity at Hinkley Point, Sizewell and Bradwell.
The Press Association