Construction on the museum is due to start in the coming weeks in the city’s Ebrington site – making it the first City Deal project in Northern Ireland to reach this stage.
It is hoped that it will open by autumn 2026.
The museum will feature six galleries and archive from the city’s rich maritime history, including the surrender of German U-boots at the end of World War Two.
That happened in May 1945 when crews from about 60 German submarines surrendered at Lisahally, on outskirts of Derry.
The US Navy also had a base in the city during WW2.
O’Dowd said the planning approval “is an important scheme which will continue the physical, economic and social regeneration of Ebrington Square, a key development site within the city”.
He added: “It will also create a new tourist attraction that will tell the story of Derry’s maritime history and be a welcome addition alongside the other recent developments in the Square.”
The planning approval also “secures the viable and long-term beneficial reuse of a number of listed buildings”, he said.
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