The Premier League club have been given the green light for a redevelopment which will see 8,500 seats added to their stadium's Main Stand, taking the overall capacity to around 54,000.
Outline proposals to increase the capacity of the Anfield Road stand by around 4,800 were also given the go-ahead by the City Council's Planning Committee on Tuesday, subject to conditions and legal agreement.
The club revealed that work on the Main Stand is due to start early next year and is expected to be completed in time for the beginning of the 2016-17 season if all goes to plan, with games still to be played at Anfield in the meantime.
Liverpool chief executive Ian Ayre said: "Today's approval by the Planning Committee is another step on our journey which we embarked on nearly two years ago.
"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."
Joe Anderson, the mayor of Liverpool, said: "This is a very important milestone in our ambitions to transform the Anfield area, bringing new jobs, investment and housing.
"The overall regeneration will see £260 million invested in Anfield. Liverpool Football Club's proposals for the stadium are a key part of this. The club is a major employer in the area and its stadium is a major draw for tourists and visitors."
The scheme will also include a carefully designed area which will be the new home for the Hillsborough Memorial.
