The property on West Street in Grimsbury is described by Cherwell District Council as "an eyesore".
The Cherwell District Council planning committee document concluded that the planned development was "acceptable".
Cherwell District Council's planning committee discussed proposals for the 707-space site in Banbury on Thursday.
After the River Cherwell flooded in 2007 a flood alleviation scheme was built in Banbury, in Oxfordshire.
BBC: Environment Agency sets up flood defences in South East
Cherwell District Council approved the plans on Monday evening for Saturdays, Sundays and Mondays from 1 December, for six weeks.
Oxfordshire County Council has agreed to sell four sites in Banbury and four in Bicester, most of which are disused, to Cherwell District Council.
BBC: New homes planned at disused Banbury and Bicester sites
Cherwell District Council and other key stakeholders are expected to be involved in discussions on how to blend the site in with the community.
Its sale was announced in June and Cherwell District Council has confirmed it is helping BCH prepare a formal bid for later this year.
But the leader of Cherwell District Council, George Reynolds, angered by the "lack of consultation", said the U-turn showed government policy is in "total disarray".
BBC: NEWS | UK | England | Oxfordshire | Anger over asylum centre U-turn
The family of a woman who died of heart failure after falling into the River Cherwell as she tried to rescue her dog have paid tribute to her.
At Oxford, punting on the Isis and Cherwell rivers, she could be frivolous and flirtatious, and all her life she tended to prefer handsome men to plain ones.
After reading it, the visitor will not linger in the city centre but scuttle past the Radcliffe Camera and Magdalen Tower, over the Cherwell, and on to the Ultimate Picture Palace, where a projectionist, solemnly dinner-jacketed, shows art-house movies to a tiny and devoted audience.
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