Up to 65 jobs are set to be created at the home, which will provide care for elderly people, including specialist end of life and dementia care.
The home will be built following the demolition of the former Guttercrest factory, next to the Lidl supermarket in Victoria Road.
The proposals, which have been approved by Shropshire Council planning officers, include 80 en-suite rooms and a hair salon, cafe and library.
A 30-space car park will be created as well as landscaped gardens.
A report by planning officer Shannon Franklin says three neighbours objected to the plans, citing concerns around overlooking, noise, traffic and flooding. Oswestry Town Council remained neutral.
Shropshire Council’s adult social care department did not object, but said there were already nine care homes in the Oswestry area of which four provided nursing care – and several had numerous vacancies.
Adult social care officers also said the number of people permanently living in residential homes in the county had fallen by 4.5 per cent in the last year, “which confirms that we have supported more people to continue to reside in the community”.
They added: “The unpredictable nature of Covid-19 has impacted the care market significantly on a national level with increased risks to continuity and care market viability.”
Ms Franklin’s report says: “The proposal to provide an 80-bed nursing home within the development boundary of Oswestry is considered to be acceptable in principle.
“On balance, both the siting scale and design are considered to be satisfactory and subject to provision of additional information… will not result in significant harm on the surrounding locality.
“Whilst a limited impact upon neighbouring residents amenity is identified on account of the scale of the development, the cumulative impact comparative to the existing scenario is negligible such that the proposal can be supported.
“The applicant has satisfactorily demonstrated that the concerns over noise impact upon the proposed occupants can be mitigated through the proposed alterations to the internal layout and provision of an acoustic glazing and ventilation scheme to be provided by condition.”
The applicant, Care Developments (Oswestry) Ltd, lodged the plans in May this year and said at the time that the scheme would “exceed all modern care standards” and re-purpose a derelict site, with the factory building “at the end of its economic life”.