Eight hectares of farmland near Derby will be used for natural burials marked by wooden plaques, carvings, trees or flowers instead of headstones.
The Locko Park estate said the cemetery will be screened by trees and would "make the greenbelt greener" and provide an income for the estate.
Erewash Borough Council unanimously approved the plans on Thursday.
Biodegradable coffins will be used at the site, next to the Bartlewood Lodge pub in Ockbrook.
The popularity of green burials has surged in recent years. In 1993 there was just one in the country, now there are more than 270.
Estate managing agent William Gagie said it would help the site "diversify" from its farming income.
"It is agricultural land and ultimately it will be converted to what appears to be woodland with no structures above ground other than planting of trees," he said,
Mr Gagie said: "It's less formal than a traditional cemetery, it probably appeals to people who are not of traditional faiths."
Councillor Howard Griffiths said the council had to compulsorily purchase land in Breaston in 1998 to provide more grave spaces after the closure of one of its cemeteries.
He said as well as creating more burial space the natural cemetery would improve rather than damage the greenbelt.
Mr Griffiths said: "I think it'll make it more revered because people will be buried in the ground and people will come here to visit.
"It'll probably protect the ground from development in the future so I'm quite happy this use is coming to this area."
Work is due to be completed by the autumn.

The clubs agreed a deal for the Bury academy graduate in November and he became a Toffees player when the transfer window reopened on Saturday.
Foulds signed his first professional contract with League One Bury in February and made two first-team appearances, both in cup competitions.
He has also played on a trial basis for Everton's Under-18 and Under-21 sides.
A natural cemetery for 11,000 burials has been approved for greenbelt land in Derbyshire.
[NEXT_CONCEPT]
Everton have completed the signing of 17-year-old Bury defender Matthew Foulds for an undisclosed fee.