Developer Joe O'Reilly has been given the go-ahead for the €600m phase II of Dundrum Town Centre, Europe's largest shopping centre.

Dun Laoghaire Rathdown county council approved the scheme late last week and barring appeals to An Bord Pleanála, O'Reilly will now be free to demolish the old shopping centre in the suburb and construct a 45,000 square metre shopping centre on the site. Negotiations are already understood to be under way with potential anchor tenants.

The new development will also include restaurants, a hotel, apartments, a medical centre, and a library in buildings that will be up to nine storeys high. Parking will be provided for 1,900 vehicles as part of the scheme.

The shopping centre site was bought by Castlethorn Construction subsidiary Lenridge Properties for €18m in 1999 and is a short walk from the hugely successful Dundrum Town Centre. O'Reilly will have to pay about €22.5m in contributions to the council before construction starts on the site. The local authority has also requested more details on the leisure element of the planned development.

O'Reilly has significant retail property assets. As well as Dundrum, he owns part of the Pavilions shopping centre in Swords, north Co Dublin, and the Ilac Centre in Dublin city centre.

He is currently planning a €1bn shopping centre dubbed Dublin Central on the site of the Carlton cinema in O'Connell Street, and owns a stake in a retail scheme on South King Street, close to St Stephen's Green.

O'Reilly set up Castlethorn with the late Liam Maye and builder John Fitzsimons.