Planning permission has been granted to former Letterkenny councillor Laurence Blake to build 310 homes, a three-lane bridge and a neighbourhood centre at Scribley.
The bridge linking the site at Scott’s farm and the Neil T Blaney Road would be the first to be built on the town in more than a century.
The retail centre would also include a creche.
Mr Blake – of Burke Blake Limited – must have over €2M in fees to the town council before the development can go ahead.