The Government will not prevent Tranmere Rovers building houses on Ingleborough Road Memorial Playing Fields in Birkenhead.
Wirrall Council approved the club's application to build up to 90 houses in October.
The building work was stalled while the Department for Communities and Local Government decided whether to scrutinise the application.
But Eric Pickles, the Communities Secretary, has now passed up the opportunity to intervene because the department has to be "very selective" about which applications it looks at.
More in the Daily Telegraph, 6 December 2012
The plans were opposed by the Wilfred Owen Association.
