The Department for Education announced yesterday that an application for Tauheedul Islam Boys' High School can proceed to the business case after a proposal was submitted to the Government.
The governors of Tauheedul Islam Girls School put together plans for a free school on the current girls school site in Bicknell Street once it moves to new premises at the Beardwood Humanities College under the Building Schools for the Future Scheme.
As the initial go ahead was granted Tauheedul bosses have revealed that parents have already started registering their children on to the waiting list.
But a teaching union warned it feared the school could undermine admissions to other schools in the borough.
It is unclear how many students will be on the roll but it will cater for boys aged 11 to 18 but it is hoped the school will open its doors in 2012.
Free schools are all-ability state-funded schools set up in response to parental demand.
Tauheedul governors said they hoped the school would stave off a migration of many boys from the state sector to being educated in independent schools.
Kam Kothia, chairman of Tauheedul Islam Girls High School, said: "This really is tremendous news for everyone in the community. For all who want the best for Blackburn boys Muslim and non-Muslim this is a once-in-a-lifetime opportunity to create a world class boysschool.
Hamid Patel, principal and chief executive of Tauheedul Islam Girls High School, said:"This will in no way affect the viability of other local schools and we will work alongside them to continue to improve life chances for all Blackburn pupils.
NUT devision secretary Simon Jones said: "This is very worrying news. It will completely undermine all the local authority careful planning for admissions across the borough at this time as we move across the BSF process.
"It is a retrograde step for community cohesion."
Ruksana Adam, one of the parents who has already registered interest for a place at the school for her son, said: "We really hope we are successful as we know that demand for places will be high."