Plans for a new care home, a new lower school and 116 new homes in Fairfield were approved by Central Beds Council at a meeting on Wednesday.
The work includes the demolition of all existing buildings at the former pig unit on Hitchin Road.
The site is situated on the east side of Hitchin Road, between Stotfold and Fairfield Park.
Cllr Michael Blair said: “The protection of employment status is very important through the care home and obviously all the benefits it provides including extra school places.”
The proposed residential care home falls within the Ivel Valley locality. The area covers eight wards which includes Shefford, Biggleswade, Sandy and Arlesey.
According to the forecast modelling there will be demand for an additional 49 care home places in Ivel Valley by 2020.
A representative from Lochailort Stotfold Ltd who are responsible for the application said it was vital the application was approved as the need for Lower School places is at a premium.
He added: “We are very pleased we have the full support of Fairfield Parish Council and look forward to delivering this project.”
£4.35 million of Section 106 money will be injected into the scheme and it is expected up to 222 new jobs will be created including 70 at the new care home.
Without the school, the redevelopment of the former Pig Unit for residential purposes was not considered to be sustainable, as there would be no lower school places within the catchment area for children of the development.
A council spokesperson said: “This development ticks two boxes. It’s a good looking development providing necessary housing and also the care home which we currently don’t have in the Fairfield/Stotfold area will be a real asset.”
Currently in Ivel Valley there is one other approved planning application for a care home at Kings Reach, Biggleswade.