Isle of Wight Council bosses have overturned a vote by councillors - who had rejected the partnership to secure £900 million of funding.
Fans To Own Portsmouth Football Club
A supporters' group has been given the go-ahead to take control of troubled npower League One club Portsmouth.
Accountants managing affairs since the club was placed into administration 14 months ago said a problem relating to the sale of the Fratton Park stadium had been solved - paving the way for the Pompey Supporters' Trust (PST) to complete a buyout.
Trust members said a club takeover by supporters was "ground-breaking'' and bigger news for Portsmouth fans than an FA Cup win.
A High Court judge had been due to analyse issues relating to the sale of the ground at a hearing in London.
But lawyers told judge Mr Justice Peter Smith that an agreement had been reached between BDO - the firm acting as administrators - and the club's former owner.
The judge said he was pleased that an agreement had been reached and that Portsmouth would be preserved.
Fans who had travelled to the High Court from the south coast applauded and cheered when the hearing ended.
PST chairman Ashley Brown welcomed the agreement, saying in a statement:
"This is a historic day for Portsmouth Football Club and for Pompey fans everywhere.
"At last, the tough work done over the last year is over and we can start to rebuild our club. Pompey fans are now days away from owning and running our club and becoming the biggest community owned football club in the country.
"We have a lot of people to thank, and much more to say, but will do that once the details of today's settlement are finalised.
"For now, we would like to offer heartfelt thanks to Pompey fans all over the world who have pledged money and have saved our club from liquidation.
"Now the next chapter of hard work begins to transform our club into something the community of Portsmouth can be proud of, both on and off the field.''
Iain McInnes, the prospective chairman of PFC commented: "If you believe you can do something you can - and we have.''
Trust director Mark Trapani - a Portsmouth car dealership boss - said the club would become Portsmouth Community Football Club Ltd.
"I think there will be clubs around the country that will look at what we have done and probably say 'this is the way forward','' he said.
"For me this is a greater day than the day Portsmouth won the FA Cup in 2008. That was one day. This is the future. The fans should see it like that too.''
Trust member Jo Collins added: "This is ground-breaking for football clubs.''
Mr Justice Peter Smith, who said he was a Hull fan, had told the court the agreement would enable the trust to take control.
"I am very pleased that the parties have agreed provisions which will preserve the club,'' he said. "On we go with the last three games.''
Trevor Birch, a BDO partner and a joint administrator of Portsmouth, said outside court:
"We were appointed to secure the best deal for creditors and today's developments enable us to fulfil that obligation.''
He added: "The past year has been incredibly challenging for everyone involved with the club - fans, staff and players - and I want to thank them all for their support.
"They deserve credit for keeping Portsmouth Football Club alive despite what, at times, seemed like insurmountable obstacles and I'm sure that their actions will inspire supporters' groups at other clubs.''
A High Court judge placed Portsmouth into administration in February 2012 after being told the club had an unpaid tax bill of around £2 million and owed other creditors about the same.
Football League bosses had said their preferred bidder was the trust.
And they had warned that the club would lose its league membership if it remained in administration at the end of the season.
Portsmouth - struggling near the bottom of League One - still face a battle to avoid relegation.
The busy road's being made two lanes in both directions between Segensworth and Titchfield - it's due to take 18 months.
Police want to trace man after 11-Year-Old Approached Near Oasis Academy
Family Appeal Is Shared Online After 14-Year-Old Missing Since Friday
Recently Played Tracks
Deposit £10 to get a £40 Welcome Bonus - That's £50 to play bingo, slots and more!*
Over 50 tracks to make you feel-good. New album out now...
Find your local four day weather report here.
What's happening on the roads where you are?
Make Heart the soundtrack to your day and you could be a winner with great prizes up for grabs throughout the day.
Find out more about some of the companies advertising on Heart.
Get some great ideas on how to advertise your business on radio, online and on mobile.