The judges at London's Appeal Court rejected a challenge by protestors to the scheme which the protestors claim would impact on London's 19th century Bishopsgate Goods Yard - once described by Prince Charles as 'an astonishing hidden treasure'.
Today, dismissing the challenge by railway enthusiast Andy Prokopp, Lord Justice Buxton who was sitting with Lords Justices Schiemann and Kennedy said: 'The need for and benefits of the East London Line extension are undisputed.
'Extensive evidence has been filed by London Underground Ltd and by the Strategic Rail Authority demonstrating that in practical terms there is no alternative to the present plans, and that any further delay would almost certainly be fatal to the project.
'That evidence, which comes from technical professionals and not just from administrators, has not been challenged.'
He said that there had been no evidence to the contrary and continued: 'There is therefore nothing that the court can properly put in the scales against the overwhelming weight of evidence in favour of permitting the East London Line extension to proceed without further delay.'
The three day Appeal Court challenge heard last month was against a High Court decision of Mr Justice Collins in May in which he granted an order that the council should re-consider its grant of consent for the scheme.
However, at the same time he took the view that if the council, re-considered the matter using correct procedures, there would be nothing to stop it reaching the same decision as before and granting fresh consent.
Lawyers for Prokopp had argued that EC requirements in respect of Environmental Impact Assessments had not been comp lied with.
The London Underground plans for the site relate to the extension of the line northwards to Dalston, and will involve demolition works on the Bishopsgate Goods Yard site north of Liverpool Street Station and fronting onto Shoreditch High Street.
Later London's mayor, Ken Livingstone said: 'This is great news for London. I will be meeting with the transport minister tomorrow to ask him to give the go-ahead for this vital scheme.'
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A statement from Tower Hamlets LBC follows:
'It is estimated that the extension to the line could bring millions of pounds of investment to the area, creating more jobs and businesses.
'Tower Hamlets LBC leader, Helal Abbas, said: 'This decision was the right decision for the people of Tower Hamlets.
'The East London Line Extension is a key part of the council's regeneration plans and will benefit east London as a whole, encouraging more businesses to the area and creating more jobs for local people.
'I hope that construction work will now be able to start as a matter of urgency.'
'Cllr Abbas added: 'This whole process has gone on much longer than anyone wanted, but it was essential that our planners followed the correct procedures at all times.
'The legal issues surrounding this development have now been brought to a close in the Court of Appeal and Tower Hamlets' residents can now look forward to improved transport links and the wider regeneration benefits the extension to this line will bring.''