Planners have removed a condition preventing the Ferris wheel from being used between October 20 and March 1.
Natural England had said the 110ft attraction could be a risk to migrating Brent geese.
But earlier this year pier bosses put the attraction up in February – forcing the council to say it was weighing up taking action.
Now council planners have backtracked and said Billy Manning Ltd can run the wheel all year.
Jill Norman, from Billy Manning Ltd, said: ‘The directors are delighted that the Solent Wheel will be staying in its home town of Southsea.
‘The wheel has been up and open since Easter and will be open for the summer season each year from March to October, then will probably go out to a Christmas fair.’
It comes as Clarence Pier’s rollercoaster Skyways is being dismantled for refurbishment – and will not be back until 2020.
Portsmouth City Council head of planning Claire Upton-Brown said the Solent Wheel operator had supplied ‘basic survey work’ about Brent geese, leading to the restriction.
She said: ‘‘Natural England has been undertaking its own research in conjunction with the council and other local planning authorities as part of a separate Solent-wide strategy over the past two winters, and have now concluded that a significant impact from the wheel during the bird overwintering period is unlikely. The council’s ecologist has agreed with this view and, as a result, the local planning authority proactively contacted the applicant to make them aware of the findings and subsequently gave approval for the wheel to be sited on a permanent basis.’
Councillor Donna Jones, leader of the city council Tory group, said: ‘The removal of the condition for the Solent Wheel to be taken down during the winter months is good because the condition when it was originally suggested by Natural England because of the Brent geese, it did seem a little over-burdensome condition at the time it was done.’
Cllr Jones added: ‘It’s good for the local economy and for job creation and the Solent Wheel is one of the key attractions on the south coast.
‘I hope this will encourage more people to visit the city of Portsmouth all year round.’