An Bord Pleanála has granted planning permission for a 32km greenway in south Kerry and the compulsory purchase of over 220 landholdings along the route.
The planning permission is subject to 11 conditions.
The confirmation of the Compulsory Purchase Order of the landholdings along the former Ring of Kerry railroad is subject to modifications.
The project, which has been mired in controversy since it was first mooted six years ago, was the subject of a month long oral hearing last year.
The Cathaoirleach of Kerry County Council, Cllr Patrick Connor-Scarteen, has welcomed the decision, saying it represents an enormous boost for the county and for south Kerry in particular.
"I am delighted that An Bord Pleanála has given this project the green light.
"This greenway will bring huge tourism, social and economic benefits to the entire south Kerry area and I look forward to its construction at the earliest opportunity," he said.
Kerry County Council is currently considering the details contained in the An Bord Pleanála decision and will comment further in due course.
The chairman of the Kerry branch of the Irish Farmers' Association has said the organisation will be reflecting on the decision and analysing the implications for farmers and landowners.
Pat O'Driscoll said the IFA recognised the importance of projects, such as the greenway, in terms of the potential for agri-tourism and the promotion of economic activity in rural areas.
However, he added that the farming body is committed to working with all agencies to develop a Voluntary Land Acquisition Agreement strategy for amenity projects that would avoid the use of CPOs.
At a hearing last year, Kerry County Council said the greenway is needed to help address ongoing economic and population decline in the south of the county.
The council also said the greenway, stretching from Reenard, southwest of Cahirciveen to Faha, west of Glenbeigh, would not have a significant impact on the nearby environment.
However, it was opposed by some people, mainly farmers who were against the council's plan to impose CPOs.
The greenway is planned as a three-metre-wide paved stretch of "roadway" for use by cyclists and pedestrians.
The council hopes it would follow in the success of the Great Western Greenway in Mayo and the Waterford Greenway, which have attracted large visitor numbers.
Estimated at costing more than €20m, the greenway will face considerable engineering challenges.
Some of the old line's most impressive structures, the Caherisveen railway bridge, the Gleesk viaduct and the Drung Hill Tunnels are to be repaired.
Underpasses of the N70 Ring of Kerry, as well as a new bridge, will also be constructed.
In 1893, The Great Southern Railway from Killorglin to Cahersiveen provided access to national markets for farmers and fishermen and brought tourists to the area.
However, a decline in population and industry followed its closure in 1960.