Balfour Beatty is to create 2,100 new bedrooms on the University's campus and work is scheduled to begin in January 2017.
The contractor will also develop a new building for the Student's Union as well as social facilities.
The new accommodation buildings will replace the existing East Slope student accommodation and forms the first stage of a £500 million investment programme to modernise the University's campus.
John Duffy, University of Sussex Registrar, welcomed the projects approval.
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He said: "This means that we will now be able to house more students in University-managed accommodation, which will take away some of the pressure of housing in the city.
"In considering the redevelopment options, we invited students to tell us what sort of facilities they would like to have in their accommodation and these results were fed into the design and planning process."
Sir Basil Spence, the original architect of the University, created a number of signature buildings. These include Falmer House, the Meeting House and the newly refurbished Attenborough Centre for the Creative Arts.
Mr Duffy added: "We will be renewing the original Spence vision with the creation of new and equally distinctive signature buildings, as well as better pathways and movement through the campus, sustaining lines of sight to the South Downs. The choice of building materials will also echo those favoured by Spence."
The first phase of the scheme will be ready around September/October 2018, with all work completed by 2020.
(LM/CD)
