Two blocks of council homes, along with a health centre and community centre in Abbey Road can be knocked down and redeveloped to build new homes.
The scheme will see Emminster and Hinstock blocks demolished, along with the ground-floor Belsize Priory GP surgery, Abbey Community Centre and the Lilly Langtry pub.
They will be replaced with three new blocks of flats ranging from four to 11-storeys high.
Camden's planning committee approved phase three of the redevelopment, at the junction of Abbey Road and Belsize Road, on Thursday (October 13). Due to the height of the blocks, it goes to the mayor of London for final approval.
The scheme will see shops including Oscar's Den, Hampstead Pianos and Abbey Wine and Grocery knocked down. Traders have complained that Camden has been unable to enable them to move into suitable premises. The council said it is helping businesses to move and two are staying in the area.
The redevelopment has seen residents decanted from the 74 flats and the committee was told most have remained in the area and will get offers of new homes in Camden.
The first phase of the scheme was finished in 2019 and a replacement medical centre and community centre have already been built although they are not yet open.
Planning officer David Fowler told the committee that “it does seem that the design is not particularly controversial or unpopular with anybody”, following consultation.
A previous scheme to build 100 homes, 48 “affordable”, already had planning permission.
The council commissioned new plans for 139 homes – with 46 larger affordable homes with two or three bedrooms.
Mr Fowler said: “The applicant has added more private accommodation to make this scheme more viable."
Cllr Liam Martin-Lane (Lab, King’s Cross) wanted to know whether there was scope to increase the number of affordable homes. Mr Fowler said there will be early and late-stage viability reviews.
Cllr Will Prince (Lab, South Hampstead) asked whether demolition - approved in 2014, before Camden declared a climate emergency - is “the right choice” given its environmental impact.
Head of development Bethany Cullen said the council looked at whether the same number of homes could be created if the building was retained, saying she realises it's "quite a difficult trade off”.
The scheme includes heat pumps and solar panels.
Cllr Lloyd Hatton (Lab, Kilburn) asked about steps flood mitigation as the site is close to homes which are “still uninhabitable” because of flooding.
He was told steps to reduce the impact include the use of porous surfaces outside to allow drainage and green roofs.
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