Proposals were put forward for the homes, a school and community facilities in the Upper Redhill area of the town.
When Wellingborough Council declined to make a decision on the scheme the developers, North Northants LLP - a subsidiary of Bee Bee
Developments - lodged an appeal.
The authority heard yesterday that Secretary of State for Communities and Local Government John Denham agrees with the Planning Inspector's decision that the development should be approved.
The decision comes after councillors failed to get a planning inquiry re-opened to determine if the number of affordable housing in the development could be increased to 30 per cent.
A letter to developers and Wellingborough Council from the Department of Communities and Local Government states: "In this case, the Secretary of State is satisfied that the impact on amenity from the proposed development, when weighed in the balance of all other considerations, would not be such as to justify refusing planning permission."
Campaigners living in the area said they were not surprised by the decision, despite months of fighting the plans.
Susan Suttle, secretary and vice-chair of Redhill Grange Community Association, said its members still had serious concerns about how Wellingborough will cope with such a development.
She said: "After the public inquiry, it's not a great surprise that they have suggested the development goes ahead.
"It was a foregone conclusion that it was going to go ahead.
"I don't believe the Government is democratic because there was no local say in the matter.
"I do feel that more should be made of the disappearing farmland.
"It is in private hands so there's not a lot we can do but there's not much countryside round Wellingborough and I don't know where all this infrastructure will go."
Mrs Suttle said it wasn't practical for her to consider moving and that most of the people on the estate have been there for more than 20 years.
She said: "The town won't be able to cope with this level of houses. It will be disastrous for the town centre. These houses aren't for local people. They are for London overspill.