In recent months, proposals were lodged for a single-storey extension at Diamond Hall Infant Academy in Millfield.
This included replacing existing covered play space with a new 3.2m high building to make way for an extra 20 nursery pupils.
According to council planning papers, the changes aimed to compensate for the loss of the nearby Millfield Community Nursery.
As previously reported, the nursery had faced a growing budget deficit since 2015, which was expected to rise to nearly half a million pounds by 2023/24.
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Another issue included falling pupil numbers, with the nursery operating at half its capacity last spring.
After public consultation and considering alternative options, council bosses agreed to close the nursery from August 31, 2019.
Sunderland City Council leader Graeme Miller said at the time it was “a terrible decision that unfortunately has to be taken” and no councillor ever wanted to close a school.
Diamond Hall Infant and Junior Academy is less than half a mile away from the site.
Following extension works, the number of age-three nursery school places will rise to a maximum of 56.
However, no staffing increases are planned to reflect the changes.
Sunderland City Council’s Planning Authority approved the plans on Wednesday, January 29.
A planning report adds that the scheme was acceptable in terms of design, appearance and impact on residential amenities.
Under planning conditions, work must take place within the next three years.