Bury Council planners have given Capstone Care permission to build the 53-bed home for people with dementia, which would be sited next door to the existing 50-bed Walshaw Hall Care Home on greenbelt land in Bradshaw Road.
Two neighbours formally objected, claiming the three-storey building would be too tall and a new car park would not be required.
At a meeting last week, Bury planning committee considered a council report which said the car park was deemed appropriate, as was the proposed building because it would be lower than the existing care home.
The dementia unit is set to be a round-the-clock facility.
John Odell, of Capstone Care, said: “At the moment, there are cases where some of those people living at the Walshaw Hall develop dementia and we do not have the facilities to accommodate them.
“There is a shortage of dementia care in the vicinity, which often means people have to move elsewhere and that can be very stressful for families.
“This new facility would mean people could avoid that upset.
“For residents, the facilities will be state-of-the-art. We want this to be a place they are proud to call home.”
Government figures show that, by 2022, one in eight people aged over 80 will have dementia.