The Peruvian Ministry of Energy and Mines has given environmental clearance for Southern Peru Copper's $1.4bn Tia Maria project in the Arequipa region.
The project had been halted for three years after local residents protested against the mine over the use of water sources in the region.
The residents clashed with police in 2011, leaving several people dead.
The protests forced Southern Copper to modify its environmental impact study and conduct fresh public hearings.
The mine is located at the Cocachacra, Mejia and Dean Valdivia districts, Islay province, Arequipa department.
Construction on the Tia Maria project will begin later in the year and will be completed in two years. However, the company will have to first obtain construction licences for the project.
Southern Copper CEO Oscar Gonzalez Rocha was quoted by The Walls Street Journal as saying: "We will definitely be able to have production [at Tia Maria] start by the beginning of 2017."
The mine is expected to produce 120,000t of copper a year during its lifetime of 20 years.
Southern Copper also operates the Toquepala and the Cuajone mines in Peru.
The Peruvian Government is expecting to double its copper production to 2.8 million tonnes (Mt) a year by 2016, to regain its position as the second largest producer in the world.
Copper production in the country is expected to increase to 2.8Mt in 2016, from 1.4Mt in 2013.
The Cerro Verde mine expansion is a prominent copper project that would help the country reach its goal.
Image: The Tia Maria platinum mine in the Arequipa region of Peru. Photo: courtesy of Ministry of Energy and Mines.