The Vue chain ditched a scheme granted planning permission in 2012 for a cinema in the Buttermarket centre.
But the borough council has approved a new proposal for a 16-screen multiplex, gym, new shops, restaurants and bars.
The centre, which opened in 1992, was bought in March for £9.2m by Capital & Regional and Drum Property Group.
The application has been granted subject to a number of conditions.
It is hoped the multiplex will increase visitor numbers to the town, especially in the evening.
Hugh Scott-Barrett, chief executive of Capital & Regional, said: "We believe our proposals will revitalise not just Buttermarket shopping centre but Ipswich town centre as a whole by introducing a tailored mix of retail and leisure facilities."
The new scheme also includes the widening of the St Stephen's Lane atrium inside the centre and six new restaurants and bars on the ground floor.
The new 16-screen cinema will span the building's three floors.
An area for a large store will remain on the ground floor but there will also be seven other shops, restaurants and bars.
"We have a real opportunity to develop Buttermarket into a vibrant shopping centre everyone can be proud of," Mr Scott-Barrett said.

Dyfi projects manager Emyr Evans said "threats, some of them very personal" had been received over decisions at the Glaslyn and Dyfi nests in mid Wales.
He added a ringer with decades of experience had quit as a result.
Mr Evans said the projects welcomed scrutiny but had received "a torrent of critical, vitriolic and abusive comments".
Some of the criticism focused on the issue of intervention when a chick is injured or unwell - with some claiming more should be done at the first sign of trouble and others arguing against any intervention at all.
Mr Evans said decisions were based solely on what is deemed to be the best course of action at that time for the osprey and its family members - with these carrying legal implications.
There was also criticism of bird ringing (an identification tool), which Mr Evans said was strictly regulated and had "stood the test of time" for more than a century.
"Ringers are tree climbers, cliff hangers, cave clingers and rope and ladder hugging professionals working in inaccessible and tough environments most of us skip a heart beat just thinking about," he added.
"They are amongst the most respected fieldworkers in the bird world, and most do it for no pay, purely on a voluntary basis.
"It is heartbreaking that a ringer with decades of experience and one of the most caring and compassionate people I know, decides to throw in the towel after being so upset by a tiny minority."
During the first 10 years at Glaslyn, Gwynedd, two or three chicks were born per year, "completely defying" the national average by 200-300%, Mr Evans said in a statement released by Bywyd Gwyllt Glaslyn Wildlife and Montgomeryshire Wildlife Trust.
But in 2016, a bird was displaced in his nest at the Dyfi project near Machynlleth and photographed a few weeks later with a possible injury, while an egg did not hatch. The same situation occurred at Glaslyn.
"It's hardly ever happened before," Mr Evans said.
Some of the chicks also sustained injuries, two survived and one died.
"The next time we have an injured chick or an osprey in distress somewhere, the last thing we want to do is to worry about what people, sometimes thousands of miles away, may think of our decisions," Mr Evans said.
"The vast majority of you guys are completely understanding of the nature of our work and the decisions we sometimes have to make when things go wrong."
Mr Evans added the project cared deeply about the ospreys but could not always guarantee "happy ever after" endings.
"Abuse has no place in civil society," he said.
"At the first sign of a limp or a cough, we can't simply scramble people together and climb a 100 foot tree or ladder up to a 40 foot platform. These actions have consequences on all sorts of other things such as the other birds concerned, legally, and the safety of the people involved.
"These are wild birds, it's nature, it's unpredictable and it certainly isn't Disney World."
Source: Dyfi Ospreys Projects
An Ipswich shopping centre is to be transformed with a multi-screen cinema after previously abandoned plans were altered.
[NEXT_CONCEPT]
A bird sanctuary has defended decisions made over the welfare of ospreys after social media criticism.