A senior Delhi Environment Department official said the necessary orders have been issued.
The NTPC, which operates the plant, is expected to initiate steps to open it as soon as possible.
This comes a day after environment body Greenpeace India said any such move will be a "setback" to the efforts in reducing public health crisis associated with air pollution.
The Supreme Court-appointed Environment Pollution (Prevention and Control) Authority had paved the way for its reopening last month. It was allowed to be reopened only after March 14.
The IIT-Kanpur report had identified the coal-based plant as one of the major sources of pollution in the national capital.
Green body Centre for Science and Environment (CSE), in its analysis of 47 coal-based thermal power plants in the country, had also held the plant as one of the "most polluting".