Beamish Museum’s plans to build a 1950s town, Georgian coaching inn and a replica of a Weardale farm have been approved by Durham County Council.
It is anticipated that the £17 million expansion will attract an extra 100,000 visitors to the region and will see the museum offer overnight stays.
Richard Evans, Beamish Museum director, said: “We’re really delighted with the news that our exciting development plans for Beamish over the next four years now have planning approval – it is a real milestone in the 45-year history of the region’s living museum.
“It is great to see the important economic and social value of Beamish being recognised and supported so clearly.
“This is the single largest project ever undertaken at Beamish.
“It will enable us to create a range of new exhibits for visitors to enjoy across the museum site, offering people new ways to experience the history of the north east.
“By 2020 we hope to welcome some 750,000 people every year – including nearly 400,000 tourists from outside the region, which will have a huge impact on the economy in many communities.
“We will also create around 95 new jobs and 50 apprentices at the museum – meaning we should be employing around 500 people by the end of this decade.”
Beamish has received initial support for a £10.75 million Heritage Lottery Fund (HLF) grant.
Beamish, the Living Museum of the North, recreates life in the 1820s, 1900s and 1940s at the 350-acre open-air museum.
The 1950s Town plans include a cinema, houses, a cafe and aged miners’ homes which will provide a centre for people living with dementia, their families and carers.