The announcement was the latest positive development for the project, which Denmark's Orsted warned just months ago could fail without a new contract that would cover soaring costs for equipment and financing.
Orsted and Eversource said separately that they had taken a final investment decision on the project in conjunction with the federal approval and would begin onshore construction.
Sunrise Wind is the seventh offshore wind project approval by President Joe Biden's Interior Department, which has a goal of permitting 30 gigawatts of offshore wind capacity by 2030 as part of the president's climate change agenda.
Sunrise Wind, which is expected to be the nation's largest offshore wind project once it is completed in 2026, was awarded a conditional contract by New York state officials last month under a program meant to support the embattled industry.
In a statement, the Interior Department said the project would have a total capacity of 924 megawatts. It will create about 800 jobs during construction and 300 during operations.
Interior's Bureau of Ocean Energy Management, which is responsible for permitting offshore wind facilities, approved fewer wind turbines than the developer had proposed to reduce impacts to seafloor habitats and Atlantic cod.
Sunrise Wind will be located about 16 nautical miles south of Martha's Vineyard, Massachusetts and 27 nautical miles east of Montauk, New York.
Orsted is negotiating final terms for the project's 25-year contract. The company plans to acquire Eversource's 50% stake in Sunrise Wind, but the utility will lead the project's onshore construction.
Orsted took a large financial hit on its U.S. offshore wind portfolio last year and canceled development of two projects in New Jersey.
