The Environment Agency has given the final go-ahead for a controversial incinerator in Cardiff.
The £150m waste-to-energy plant in Splott, Cardiff required an environmental permit.
The agency had wanted to assess the original advice it was given about the potential health impact. A campaign group of residents opposed the plant.
Operator Viridor said it hopes to start building work next year, with the plant fully operational by mid-2014.
Opponents said they were disappointed the Environment Agency had not imposed tighter restrictions on the incinerator.
Environment Agency Wales has said the delayed announcement was "to give the local health board an opportunity to confirm that their original advice on the potential health impacts of incinerators is still valid".
"During our extensive consultation, we received many comments from people concerned about the potential health impact of the plant," said the agency.
"We will only issue a permit to any site if we are satisfied that it will not damage the health of local people or the environment."
The agency said the permit did not relate to issues such as traffic, visual impact, operating hours and light pollution, all of which were covered by the planning permission granted by Cardiff council.
Graham Hillier, the agency's area manager for south east Wales, said: "If built, we will make sure the facility does not contravene the strict environmental standards of its permit.
"If the company does not meet the high environmental standards set by our officers, we will not hesitate to take action against them."
He said they were satisfied the proposal "did not pose a significant risk" to the health of local residents or the environment.
"We have carefully considered all the responses made during our consultation and have taken all relevant views and concerns into account," said Mr Hillier.
Planning permission was granted in the summer, although campaigners have complained that the authority wrote to just 17 households, many of them businesses close to the plant's proposed location.
Campaigners say waste problems would be better solved by "more environmentally friendly and healthier solutions".
Cardiff Against the Incinerator said it would continue its fight "in the Welsh assembly and in the neighbourhoods of Cardiff".
The group said in a statement: "We've presented dozens of documents showing the health risk from the older generation of incinerators, and no reliable evidence has been put forward from anyone showing the new generation are any better.
"We've shown that government advice on incineration is so flawed as to be, in the words of the Royal Society, 'potentially misleading'.
"We've presented evidence that's convinced councillors, AMs [assembly members] and Cardiff residents that operating an incinerator less than a half-mile from their homes is irresponsible."
Viridor, which operates a large incinerator at Slough near London, has tendered for a contract to deal with waste from Cardiff, Vale of Glamorgan, Caerphilly, Newport and Monmouthshire councils.
Waste is burned and the power generated is converted into electricity and fed into the national grid.
Viridor has said the plant would create enough energy to power 50,000 homes.