The BBC announced last February that it would be moving its flagship cooking show to the city.
MasterChef's new home, featuring a sound stage, smaller studios, pre- and post-filming areas, and an outdoor filming area, will be the former Banana Warehouse located at the Warwick Bar site next to the Grand Union Canal.
The transformation of the grade II-listed building, which will be occupied by television production company Shine TV, can now go ahead, after council planners gave planning consent for the work.
London-based property developer and investor Stanhope, in partnership with Homes England, is leading the renovation, with design by Digbeth-based architecture practice K4 and planning consultancy from Avison Young.
Birmingham City Council leader Cllr Ian Ward said: "The BBC decision to switch MasterChef production to Birmingham is a huge vote of confidence in our creative sector and planning consent for the new studio in Digbeth is the next important step in this exciting project.
"Birmingham is a young, creative city and also a fantastic Food City. With five Michelin-starred restaurants, the world-famous Balti Triangle, a vibrant street food scene and a host of amazing independents, this is the perfect home for the BBC’s flagship culinary programme.
"2022 was Birmingham's year and we are determined to build on the outstanding success of the Commonwealth Games, as we create jobs and opportunities for people across this city. We look forward to welcoming MasterChef to Digbeth."
The new studio, close to HS2 and the proposed new BBC Birmingham HQ at Typhoo Wharf, will be part of a wider masterplan for the Warwick Bar area of Digbeth, which is intended to incorporate a range of uses including film and TV studios, workspace, hospitality and residential.