The modern quarter will be made up of retail and office space, linked by public squares.
Retail space for 90 stores will be created in addition to 15,000 sq ft of office space, up to 250 homes, a hotel and 1,800 car parking spaces.
Cllr Dawe said the decision sends out an important message to the world that Edinburgh is an excellent place to invest and to conduct business.
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"It shows we can work positively with investors to create cutting-edge retail and housing projects, which fit well with our historic and beautiful city centre. We have ambitious plans for Edinburgh, and the new St James Quarter due for completion in 2016, will play an important part in these."
Looking to the future, Cllr Dawe continued: "Our award-winning capital city is exceptionally well placed to welcome and nurture future developments such as St James Quarter.
"We have a well educated and highly skilled population, we are well connected thanks to the ongoing investment in our transport infrastructure, and we are used to hosting to visitors over four million people to our beautiful city each year."
(GK/JM)
