Top level talks took place between the club's new owners George Gillett, Tom Hicks, and chief executive Rick Parry with city council leader Warren Bradley and director of regeneration John Kelly.
 
The council gave the go-ahead to the multi-million pound redevelopment.
 
Tenders for the refurbishment of Stanley Park will go out in April with a contractor to be appointed and work starting by the end of July, with the work completed by the end of 2008.
 
Councillor Warren Bradley said: "It has long been the dream of fans, and the ambition of the club, to build a fantastic stadium to rival the best anywhere in the world. Today, the decisions are now in place to turn the dream of a new Anfield, into a reality.
 
"We have worked tirelessly with the club and its new owners, and the final agreements are now almost in place to allow the work to start in a matter of weeks. A world-class stadium, fit for a world-class club and a word-class city, is now a real prospect.
 
He added: "The benefits will reach out much further than football. Our agreement will secure the massive regeneration of the Anfield area and the transformation of Stanley Park. Today will go down as a significant date in the history of the club and the city."
 
The news has put an end to speculation about a shared stadium with Everton Football Club.