The decision to allow the proposal to go ahead at a site near Kirby Misperton is a huge shot in the arm for the energy industry's and the Government's attempts to get a UK fracking industry off the ground.
Protesters who had gathered outside Northallerton's County Hall during the two-day hearing met the decision with shouts of dismay and vowed to continue their fight.
More than 80 speakers had told the county council's planning committee of the fears over the possible impact of fracking on water, farming, tourism and the wider environment.
But Third Energy insisted the objections were based on misunderstandings and fearmongering and pointed to its record of mining gas in the area through conventional means.
Campaign groups are likely to consider whether they can seek a judicial review of the planning decision.
Some are also expected to call for direct action at the site at Kirby Misperton to try and prevent the fracking go ahead.
The county council had received more than 4,000 objections to the proposal.
Ian Conlan, from the Frack Free Ryedale campaign group, said: “It is just appalling that despite the strength of public opposition to this application it has been pushed through by councillors, who are being told what to do by a government that is determined to support the fracking industry."
Third Energy chief executive Rasik Valand said his reaction to the decision was one of "relief" after two years waiting and he was confident the company's plans for Kirby Misperton did not pose a threat to safety.
He said it would be "many many months" before work begins on the site and he believed "fears will diminish" once they have carried out the process safely.
Fracking was suspended in Lancashire in 2011 over concerns at earth tremors. Two applications to frack in the county again last year were rejected.
The rejections were a significant blow to the Government's efforts to kickstart a UK fracking industry, which it claims would create jobs, help energy security and generate valueable tax revenues.
Opponents of fracking had hoped a further rejection in North Yorkshire would persuade the energy industry and the Government public opinion could not be won over.