The terminal will be constructed at Princes Half-Tide Dock, nearly 700m downriver of the current Pier Head facility.
Designs by architect The Manser Practice include a riverside footbridge, which will link the terminal to a proposed hotel, set to be built to serve both the Isle of Man terminal and the nearby cruise liner terminal.
IOM Chief Minister Howard Quayle said: “Gaining planning consent is brilliant news, and the next step in delivering this vital project.
The need to secure such a strategically important asset was acknowledged in our Programme for Government and we now look forward to seeing the island’s new terminal take shape.”
The new terminal is scheduled to open in late 2020. It will sit within developer Peel’s £5bn Liverpool Waters regeneration scheme, which is transforming 60 hectares of the city’s north docks.
Joe Anderson, Mayor of Liverpool, said: “The new terminal is a critical piece in our regeneration plans for the north shore of Liverpool. The city council is investing a huge amount of money in the transport infrastructure to support this new facility and we are delighted it now has planning approval and can look forward to its completion.
“The Isle of Man and Liverpool have a historic relationship and this new ferry terminal will cement our strong links and forge even closer ties into the future.”