Capacity of the Resorts World Arena in Solihull will grow by 6,000 people after planning chiefs backed its expansion.
The move by the arena's owner NEC Group will see the concert venue be able to hold 21,600 people and become bigger than the O2 in London.
Around £45 million is due to be invested into the complex, the largest investment since a £29 million overhaul a decade ago as part of a new title sponsorship deal with electronics giant LG.
Around 160 jobs will be created during the construction and up to 800 would be employed to work during the biggest events - almost a third more than at present.
Members of Solihull Metropolitan Borough Council's planning committee gave the revamp unanimous backing at their meeting last night.
The development will include a new roof 32 feet higher than the current structure. Work is due to be completed in time for the 2022 Commonwealth Games in Birmingham.
Speaking at the planning committee meeting, Cllr David Cole said he was sad the "iconic" look of the current arena was set to disappear, comparing the new proposals to more like a football stadium.
"When I come back from late-night council meetings, especially in the winter, it's lit-up quite well and the towers and the support structures do it justice,” he said.
Cllr Glenis Slater added: "(The scheme) is very much needed if it's going to keep up with the other cities in this country."
But she said there needed to be a serious look at how the surrounding roads coped with big events at the venue going forward.
Kim Allen, a council planning officer, said the proposals had been scrutinised by Highways England because of the site's proximity to the M42.
Her colleague Ben Malin said the council had also been involved in discussions about the impact on traffic, with modelling suggesting there would not be a "severe" impact.
"It's also worth noting that [the application] for the improvements to the M42 junction was recently approved, which should then also ease congestion in and around that area in future," he told committee members.
Papers submitted to the council on behalf of the NEC Group said the arena had become outdated and the revamp would help it keep up to date with the demands of the biggest live shows.
