Sixteen homes can be built on the site of the former Follies Cabaret restaurant, in Onchan.
Planners approved the application (13/00575/B) for the three- and four-bedroom homes with roads and drainage by Trevor McCullough, of Mullinaragher Road, Santon.
The proposal includes demolishing small outbuildings on the site, which has residential properties on three sides of its boundary.
A number of conditions were attached to the approval.
No site works or clearance can take place until protective fencing is in place around trees and landscape areas.
And the development can’t be occupied until the parking and turning areas have been provided.
Mr McCullough applied in May 2013 for 18 two-and three-bedroom houses on the Harbour Road site, once known as Molly’s.
Then in January he submitted amended plans for 16 houses, with associated infrastructure including roads and drainage.
The footprint of the scheme occupies just over 55 per cent of the footprint for a plan for 24 sheltered housing flats approved on appeal in 2008.