The incentives will support Atlanta-based Pope & Land's residential project and will come from a $5.2 million Recapture Enhanced Value grant and $1.8 million from the City for infrastructure improvements.
The REV grants are reimbursements by the City for property taxes and investments already paid by developers.
Pope & Land proposes to develop about 300 apartments on land bounded by Park Street to the north, Riverside Avenue to the south, Jackson Street to the west and Leila Street to the east. It falls within the Northbank Redevelopment Area.
The site is next to the 220 Riverside project that broke ground Tuesday.
Pope & Land anticipates average monthly rents of $1,300 for the average 900-square-foot units.
The apartments will face Park Street, while commercial space, to be developed later, will face Riverside Avenue.
Authority members approved the deal, although several questioned why the project would be gated and streets within it would be privatized.
The plans have been approved by the Downtown Development Review Board, part of the City Office of Economic Development, which reviewed the plans earlier this year and worked with the developer.
Authority Vice Chairman Oliver Barakat said such "super block" projects are considered negative in urban planning and affect the walkability of the area.
Legislation was introduced Tuesday with City Council, which has the final say on the deal.
When an authority CEO is hired and a Downtown master planned is approved, the authority will become the final clearinghouse on Downtown-based deals.
The 220 Riverside project broke ground on a seven-story, 294- unit multifamily rental housing and mixed-use development that is slated to be completed by August 2014.
The Downtown Investment Authority approved $7 million in City incentives Wednesday for a second Brooklyn residential project.