Planners spent 21 months considering the most recent application, which will see 20 flats and three houses built, along with underground parking for 28 cars, 12 bicycles and three motorbikes.
Kerry Mountford, from development company Qube, said they were pleased permission had been granted.
'The scheme has been very carefully designed using traditional forms and materials with crisp contemporary detailing,' she said.
'Scale, massing and rhythm complement and respect the streetscape along La Charroterie and will significantly improve this area of St Peter Port.'
The granite structures used to be part of an 18th century farm to the east, but in recent years have housed the tyre company.
But that has now closed and the site was sold to developers.
In the planning report, it is recognised the existing buildings are interesting but that they are set back from the road and not protected.
One part that is being protected, however, is a medieval stone which forms part of the roadside wall. The planners placed a condition on the approval that the stone would have to reused in the new development.
