The plans for the former tip site had been withdrawn last year, according to the Cumberland News.
During the 1970s a workman on the site was killed by methane leaking from the ground and in 1987 two children were killed by gas in nearby sewers.
A new strategy by Taggart Homes Carlisle to cap the waste with a three foot-thick layer of clay, together with a vertical underground barrier to stop methane leaking in from nearby contaminated land, has been given the go-ahead by environmental health officers.
Following on from the investigation and proposals, city councillors have granted planning consent for the 7.5-acre site.
The council received 13 letters of objection and a petition against the scheme after concerns about potential health hazards.
According to the newspaper, the environmental health report said: “While the detailed risk assessment concludes that the site represents a significant potential hazard to human health, the remediation and mitigation measures will enable it to be safely developed.”