Construction is expected to be completed within the next three years after the project has been issued with building permits.
Before this, the development must be reviewed by three organisations – California Coastal Commission, Los Angeles Architectural Review Board and Landmarks Commission.
Gehry's studio Gehry Partners' Ocean Avenue Project will include a hotel with 120 rooms as well as 100 residential apartments, with 44 of them reserved as deed-restricted or rent-controlled options.
Within the publicly accessible areas, the development will feature an art museum that will showcase "world-class exhibitions," as well as some of Gehry's own work, according to the architecture firm.
A pedestrian mall will house the development's various shops and restaurants.
Since then, the studio has made a number of changes to the long-awaited design including reducing the tower's height to 12 storeys in order to meet requirements imposed by the city's Downtown Community Plan.
"The Frank Gehry project is unique, brings new amenities like a cultural institution to the Downtown," said Santa Monica city manager David White.
"It will provide one-time funds to deliver city services including transportation infrastructure, parks, recreation programmes, early childhood initiatives, affordable housing, economic opportunity initiatives and more," said Santa Monica city manager David White.