Production on the field about 19 km (12 miles) off the north coast of both countries is expected to begin in late 2024, the government said.
The German region of Lower Saxony had decided last year not to grant permits for the project, but reversed that decision because of the war in Ukraine, according to the Dutch Ministry of Economic Affairs.
The announcement came a day after Russian energy giant Gazprom halted all its gas supplies to Dutch gas trader GasTerra after it refused to comply with Moscow’s demand for payment in rubles.
The Netherlands was a major supplier of natural gas for decades, but has become a net importer in recent years after drastically reducing production on the huge Groningen field in the north of the country.
Production in Groningen will stop by 2024 at the latest to mitigate seismic risks in the region and the government has repeatedly said in recent months that an increase would only be considered as a last resort to secure household supplies.