Stan Hollis was awarded the medal for his actions during the storming of the Normandy beaches on 6 June 1944.
A campaign to have a permanent memorial to him created in his home town saw a bar dedicated to him in February.
Middlesbrough Council has now granted planning permission for a bronze statue near the cenotaph on Linthorpe Road.
The statue, which will be almost 7ft (2.2m) high and cost about ??150,000, is to be funded by donations to The Stanley E. Hollis VC Memorial Fund.
Brian Bage, the fund's chairman, said it was "good news" as it had "taken us two years to get this far".
He said the fund needed a final ??30,000 to complete the bronze figure.
Hollis was a 31-year-old sergeant major with the Green Howards when he took part in the assault on Gold Beach.
As his company moved inland, he captured several gun positions and rescued two colleagues, taking more than two dozen prisoners in the process.
As a result, he was the only one of almost 62,000 British troops to be awarded the Victoria Cross on the day of the World War Two landings.
Three months after D-Day, Sgt Maj Hollis was wounded in the leg and returned to England, where he was decorated by King George VI at Buckingham Palace.
He died in February 1972 and is buried in Acklam Cemetery in Middlesbrough.
A statue honouring the only man to win the Victoria Cross on D-Day will be built in Middlesbrough after receiving council approval.