The project approved Wednesday would feature a 625-foot Ferris wheel with a view of the Statue of Liberty, New York Harbor and the Manhattan skyline.
Mayor Michael Bloomberg called it a "momentous day for Staten Island," saying it will create 2,000 jobs and draw millions of visitors each year.
The New York Wheel would be the world's tallest Ferris wheel today. But developers in Dubai are planning to build a 689-foot Ferris wheel called the Dubai Eye.
Construction of the New York Wheel is expected to begin in 2014, with a grand opening in 2016.