Chesterfield Borough Council has granted conditional planning permission for Chesterfield-based A-Rock Construction to build 16 one-bedroom apartments at the site of the All Inn at Lowgates.
The existing pub will be turned into six flats while four separate blocks will be built on the site to accommodate ten more flats.
Fifteen parking spaces will also be provided.
In a statement submitted to the borough council on behalf of A-Rock Construction, Brightman Clarke Architects said: "The proposals create a considered development that is sympathetic to both the existing character of Staveley and that of the open countryside beyond.
"The development will provide 16 new apartments offering a mixture of much-needed one-bed homes.
"The overall design has been carefully designed to reflect common materials and architectural styles of the existing town settlement."
According to planning documents, a number of residents and two councillors from Staveley Town Council expressed concerns about a potential increase in traffic as a result of the development.
The highways department at Derbyshire County Council also commented that 16 flats would 'potentially generate a significant number of vehicular movements, a proportion of which will be at peak times'.
However, a borough council report considered by councillors said: "It is considered, given the type of accommodation being proposed, the site’s proximity to the town centre and local amenities and the level of on-site parking which can be provided, the perceived impacts of the development proposals upon highway safety are not substantiated and the scheme should be accepted."
Last year, the council approved plans for the old Victoria Hotel - a vacant pub near the All Inn - to be turned into housing.