The ruling by the state's top court ends a yearslong battle to block the project.
As judges hear the case, a third major city newspaper has come out in favor of NYU's plan.
The city's top housing advocates say blocking the expansion will hamstring affordable development.
The state's Court of Appeals has agreed to hear a case brought by opponents of the NYU 2031 plan.
Apartments, schools, retail space and a waterfront park are in the works for the Village.
Opponents of NYU's 2031 expansion plan are raising money to cover their legal costs.
NYU announced the architects who will design the first part of the university's Village expansion plan.
The city now has until the end of 2018 to decide whether NYU's Bleecker St. site should become a school.
Parents want NYU to extend a year-end deadline for a new public school on Bleecker Street.
The panel overturned a lower court decision blocking some parts of the university's plan.
A rally was held in a green space threatened by the university ahead of a court hearing on the plan.
The working group's plan outlines development at the site despite neighbors' opposition.
Elected officials, community advocates and actor John Leguizamo held a press conference on Friday.
The City Council's land-use committee approved a modified expansion plan for New York University.
More than 100 angry NYU neighbors packed into a basement room at Judson Memorial Church Monday night.
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