Liverpool have been granted permission to redevelop their Anfield home by the city's municipal authorities, the Premier League club announced on Tuesday.
Members of Liverpool City Council's planning committee voted in favour of the scheme after visiting the stadium, which currently seats 45,276 and has been Liverpool's home since 1892.
Liverpool will now be able to proceed with the first phase of the project -- the addition of 8,500 seats to Anfield's main stand, taking the ground's overall capacity to around 54,000.
"Today's approval by the Planning Committee is another step on our journey which we embarked on nearly two years ago," Liverpool's chief executive officer Ian Ayre told the club's website.
"We received very positive support for our proposals during a public consultation exercise earlier this year and whilst we are delighted about the progress made today, there are still some steps that we need to navigate through in order to give us the certainty that we need to proceed with our expansion plans."
Construction work on the main stand is expected to begin early next year and be completed in time for the 2016-17 season. Matches will continue to be played at Anfield while the work is carried out.
The planning committee also approved outline proposals to expand the Anfield Road stand by adding 4,800 new seats.
In its current state, Anfield is dwarfed by the stadiums of some of Liverpool's main rivals, such as Manchester United's Old Trafford (75,731 capacity) and Arsenal's Emirates Stadium (60,338).
As a result, whereas United generated Â£127 million ($208 million, 161 million euros) in matchday revenue during the 2013-13 season, Liverpool's equivalent income was Â£52 million, according to financial analysts Deloitte's latest Annual Review of Football Finance.