The plans for Prospect House were granted planning approval at the meeting of Tynedale Local Area Council on Tuesday.
The Grade II listed building sits within the Hexham Conservation Area and is the former headquarters of Hexham Rural District Council.
The housing will include nine one-bedroom apartments, seven two-bedroom apartments and two two-bedroom cottages.
The planning application includes the demolition of the rear single storey extension and the construction of the two cottages as well as 20 car parking spaces to the rear of the building.
At the meeting, Wendy Breech, a member of Hexham Civic Society and Hexham Neighbourhood Plan Steering Group raised concerns about the proposals.
She raised issues such as the size of the flats – the smallest of which would be 34sqm, while the government’s national space standard for a one-bed apartment should be a minimum of 37sqm.
Meanwhile, she said a Hexham housing needs assessment showed a clear need for two and three-bed housing, not one-bed apartments, and she raised concerns that the apartments would be sold as buy-to-lets. But a representative from planning and development company Lichfield, which forms part of the design team for the project, said that there had been no objections from any statutory consultees.
Coun. Derek Kennedy said: “I do take on board the objections that some of the flats may be small, but we have to take into account the constraints of the building.
“One or two-bed flats are a really good thing for the centre of Hexham and it will be great to see that building come back into life again.”
Councillors unanimously agreed to approve the planning application subject to a Section 106 agreement being made in relation to affordable housing.
They requested that in addition, officers should explore the possibility of an agreement being made to provide sport and play facilities.
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