The Land and Lakes plans were agreed after a £20m deal to mitigate the impact of the development on Holyhead.
It will see a leisure park with 500 lodges and cottages at Penrhos Coastal Park, a further 315 lodges at Cae Glas, and 320 homes in the Kingsland area.
Some of the new accommodation will house workers if a new Wylfa nuclear power plant is built on the island.
"This was the largest planning application ever to be considered by the Isle of Anglesey county council," said chief executive Gwynne Jones.
"The terms agreed with Land and Lakes will bring in excess of £20m to mitigate the possible impacts an application of this scale will have on the area.
"Importantly, environmental concerns raised will also be addressed and will be the subject of appropriate remediation."
The original application for the Land and Lakes development was first put forward in 2011, following the closure of the giant Anglesey Aluminium plant in the town.
Controversially, the first part of the plans will see a holiday village built on part of the Penrhos Coastal Park, which was owned by the former metal plant.
The planning proposals were initially agreed in 2013, but it has taken since then to thrash out the deal on what is known as a 106 agreement.
It makes developers pay back into a community to cover the costs of providing additional school places, doctors and council support services.
It also ensures the bill for any additional environmental work is picked up by the developers.
The island's head of economic regeneration, Dylan J Williams added: "We're hopeful that the Land and Lakes project will bring long term economic benefits for the island as a whole and will represent a positive step in the sustainable transformation of our economy.
"We now look forward to working with Land and Lakes to ensure people and businesses can take advantage."
A £120m holiday village and houses on Anglesey which could bring about 600 jobs has been given the final go-ahead.