Councillors have approved plans for 49 new houses on Honeyholes Lane in Dunholme.
The decision was made at a West Lindsey District Council planning committee meeting on August 23 after plans were submitted by Cyden Homes Ltd earlier in the year.
This comes after councillors refused plans for 64 homes on the same site on May 31.
Plans for 49 homes will now go ahead, with a number of them being affordable housing.
The development will also include a sports facility and additional car parking.