The Arts and Islands Foundation submitted the application and founder Eric Snell is delighted it has been approved.
'This is a very big project and is fantastic news, I am really pleased,' he said.
''There is a long way to go, and it is "slowly, slowly", but we will have a complex down there.'
The application stated work must commence to transform the slaughterhouse within three years of the application being granted and no variations are allowed without prior Environment Department approval.
The slaughterhouse will be called the Channel Islands Museum of Contemporary Art. Part of the scheme would involve creating the Chinese junk, with the work taking place further up the pier on the grassy area.
The ship should take 18 months to build on land and a further year to complete in the water.
