The windfarm itself could create up to 450 jobs, and would consist of 116 turbines capable of generating enough power for up to 300 000 homes.
The project will be financed through a partnership through the Green Investment Bank (GIB) and E.On.
The energy secretary, Amber Rudd, said: “This huge investment is a vote of confidence in the UK, creating local jobs, bringing business opportunities and providing clean, home-grown energy.”
E.On will construct the onshore substation at Twineham, Sussex, which will begin next month followed by preparations for the onshore cable route. The energy company said that construction of the farm should be completed by 2018.
E.On chief executive, Tony Cocker, said: “This is an important milestone for what is a strategically important project for the UK.”