Councillors at November's Planning Committee gave unanimous support to an outline planning application submitted by the Boom Hall Trust regarding the estate located on the banks of the River Foyle.
The group dedicated to conserving and restoring the property for public benefit has proposed converting the site into a day nursery capable of accommodating up to 50 children alongside a café, cultural space and accommodation facilities.
Construction work would focus on the Georgian manor house originally built in the 18th century by James and Robert Alexander, which has remained in a state of decay since falling into disrepair after passing through various ownerships over centuries.
The shell of the historic home remains standing while new proposals aim to transform the grounds and structures into community-focused amenities.
With the outline planning application now approved, the project will advance to subsequent stages within the formal planning process.
No further immediate decisions were made regarding detailed design or funding at this stage of the procedure.