Developer Ray Turner Partnership’s plans appeared before South Holland District Council’s planning committee on Thursday.
Councillors agreed the hall should be built and given to the parish council before half of the homes are completed.
The site, which will be accessed from Littleworth Drove, has had several previous applications for homes built on it, which saw the number of houses reduce from 135 in a February 2017 application.
A 120 homes plan was approved in outline in 2018 but never completed a Section 106 agreement over the village hall aspect.
Amendments since then had sought to change the plans, including having no village hall on-site. A separate site was applied for elsewhere in Deeping St Nicholas in December 2018.
Councillor Rodney Alcock said: “This has been going on for quite a number of years, and in principle the committee were supportive several years ago.
“It’s important for the village in the sense that over a period of time they’ve lost virtually every public meeting place in the settlement and this will provide a very important element of village life.”
Chairman James Avery said there was a healthy developer contribution.
The developer must also ensure 11 affordable homes are built and £685,312 financial contributions are given to health and education authorities.
Objectors to the site had concerns including an increase in traffic and speeding, the loss of countryside, and flooding.
Councillor Peter Coupland expressed worries over the loss of affordable homes when the plans came back to reserve matters, but was told there had been “considerable discussions” between the council and developer.
However, officers said the plans would conflict with the local plan, but would be balanced out by the benefits of a “sustainable development which could have wider community benefits”.