The council has given the go-ahead to build 315 new properties as part of the third phase of the scheme, along with landscaping and associated drainage and infrastructure at the site.
Urban Union, a partnership between Robertson and McTaggart Construction, has already delivered 193 homes at the site. A further 177 homes are currently under construction. Overall, more than 700 new homes will be delivered at the development with work expected to the completed in 2023.
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The development is the result of a £42 million investment by the City of Edinburgh Council and includes £7.9m of grant funding from the Scottish Government.
Neil McKay, Managing Director of Urban Union, said: "We are very pleased with the council's decision to grant planning permission for the next phase of the Pennywell Living development.
“We are committed to creating lasting communities and look forward to expanding the strong, growing Pennywell community even further."
Jon Parry, Associate Architect at architects Barton Willmore in Scotland, said: "We are making great strides in the redevelopment of Pennywell and today's approval is yet another significant milestone.
"The proposals have been designed to be sympathetic to the earlier phases of regeneration and provide high quality, well designed energy-efficient housing set amongst a well landscaped public realm."
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