The proposals for the former Bramcote School playing fields include a six-lane running track, long jump, rugby pitch and changing rooms.
The facilities will be used by Scarborough College and also available for community use.
The plans were once part of a larger scheme from Broadland Properties which hoped to make the Filey Road area “a centre for sporting excellence” also including six tennis courts and bowling facilities.
The developers previously said these proposals had been “run into the ground” following objections from the public and Sport England.
However, the athletics track plans were later salvaged and have now been approved by Scarborough Borough Council.
Speaking at a meeting today, Cllr Phil Trumper said the athletics track would be a "game changer" for people in the borough who currently have to travel as far as York or Middlesbrough to access all-weather facilities.
Despite this, a total of 44 objections and a petition were lodged against the plans with concerns over parking and light pollution.
The South Cliff Community Group said in a letter to the council: "There is significant concern from those who live closest to the playing fields about the negative and intrusive impact that would be caused to residential amenity by the sports field lighting."
The group also said cars parked on surrounding streets would "cause significant disruption", particularly in summer when the roads are busy with tourists.
The proposals include nine lighting columns which the borough council claimed would have a "very limited" impact on residents.
Highways officials at North Yorkshire County Council also said there is "ample" on-street parking in the area.
Cllr Roberta Swiers, who represents the Cayton ward, said while she understood residents' concerns, she believed the impacts of the new sports facilities could be controlled and that these needed to be balanced against the benefits.
She said: "This will be amazing for Scarborough and is just what we need.
"It may not be the perfect place, however, if we had 20 houses on this site we would have a lot more parked cars.
"The conditions on this application are good and cover an awful lot of the problems which might arise."