The Infrastructure Minister has given Catalyst Inc. the go-ahead to develop the new building after considering a development management report from her department's Strategic Planning Directorate.
In a letter to SDLP MLA Sinéad McLaughlin she stated: "I have considered the report and advice from my officials and I have decided that reserved matters consent should be approved for the proposed development.
"It is my intention to announce that a Notice of Opinion to approve will be prepared and issued in the near future."
Ms. McLaughlin said: “I am delighted that we are now making progress at Fort George. I have been engaged in extensive discussions to enable planning approval to be given for new developments at the site. These discussions have involved the council, government departments, Catalyst and others.
“The Fort George location is one of the most important in Derry, with a commanding and beautiful view of the River Foyle. It has long been intended to be one of the transformative development sites in the city, but has been held back by a series of difficulties over the last two decades."
The application - originally lodged in 2017 - has been held up due to concerns raised by DfI Rivers 'regarding the safety and management of the Creggan Reservoirs and potential flooding risk if these reservoirs fail'.
However, DfI has now decided that it can give the green light to the development.
Its development management report states: "As this is a RM it is not possible to introduce conditions that are unrelated to the matters reserved and introduce a new issue which should have been resolved at outline stage, (even though the issue only arose subsequent to the outline approval because of new survey work by Rivers).
"DfI Planning concludes that imposition of such a condition and attempting to address new issues of principle at RM stage would be acting ultra vires. It would be unreasonable to introduce and attempt to have such matters resolved at RM stage.
"The only option therefore is to highlight to Rivers that notwithstanding their concerns, DfI Planning is limited to a consideration of the reserved matters and cannot address the safety of Council owned reservoirs at RM stage."
Ms. McLaughlin said: “We are now on the journey to realising important regeneration schemes on the site. As well as the construction of a second Catalyst business innovation centre, there is to be a major health facility at Fort George.
"Additional private sector proposals will be considered for other parts of the site. These developments will be supported by new road infrastructure. I hope and expect we will see significant job creation flow from the projects.
“Getting approval across the line has been very challenging, and I would like to thank minister Mallon, other parts of government and the council for working together and with myself to resolve difficulties.”