The approval has been granted to better showcase the listed Clocktower building as well as improve access, enhance and increase the number of toilets in the Course Enclosure.
Operating since 1731, York racecourse has seen a number of new developments and £4m has been earmarked for this latest project.
The plans have been developed in consultation with groups such as Historic England and the Environment Agency, along with local conservation and heritage groups as well as City of York Council.
The council’s planning committee agreed that the plans were designed to address both practical concerns around issues such as flood protection as well as having a positive impact on preserving the heritage of the city.
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“The Course Enclosure has always been an important part of racing at York and on a sunny day it provides an unrivalled view of the final furlong with the stunning backdrop of the grandstands,” said William Derby, chief executive and clerk of the course at York racecourse.
“It is an area of the racecourse which generations of families and racegoers enjoy.
“This scheme seeks to address the challenges of the facilities which are located on the infield.
“It will improve both the physical buildings and standard of facilities for our Course Enclosure racegoers.”
The new facilities are set to be opened during the 2018 summer race season with architects Purcell overseeing the development.