The city council has approved plans from the Co-operative Group and Moda Living for the 34-storey Angel Gardens building.
It will be built at Shudehill, on a site once home to an 18th Century cotton mill built by Richard Arkwright.
Angel Gardens will include more than 450 apartments, resident lounges, a cinema room and a rooftop garden.
Developers claim the project will "change the face" of the private rental sector and offer its customers "a lifestyle choice not currently available" in the city.
Angel Gardens is the major residential component of the regeneration of Manchester's urban land, owned by The Co-operative Group and Hermes Real Estate, NOMA.
David Pringle, a director at The Co-operative Group, said: "Angel Gardens will push the boundaries for purpose-built rental accommodation, in a location dubbed by property consultants JLL as the best residential site in the UK, outside of London."
A block of "new style" flats is to be built near Manchester's Victoria station.