The original plan was to build it on Pocklington's Walk but that was rejected by the new city council when it came into power in May.

An alternative proposal for a �4m shelter for 40 people on Conduit Street was then put forward but faced opposition from local businesses.

The Secretary of State has now confirmed the planning application can be approved by the city council.

Work on the centre is expected to start this summer, and to be completed by August 2005.

The plans include a GP surgery and counselling service.

Residents and businesses had said they were worried those at the hostel would be vulnerable to drug-dealing and prostitution in the area.