Sacramento's city council has agreed a financing plan for a new arena for the Sacramento Kings.
The board voted 7-2 in favour of the plans, which will see a $477m (£283m) facility open in time for the start of the 2016-17 NBA season.
Mayor Kevin Johnson, a former three-time NBA All-Star, told reporters: "We had our backs against the wall, but we defied the odds. We made a comeback for the ages, and in doing so, I feel like we unleashed the very best that Sacramento has to offer."
As well as an arena, the development will include a hotel, office tower and shopping center.