Shellharbour City Council has approved the development application for Wings Over Illawarra 2013, which this year celebrates naval aviation.
The air show is on May 5 at Illawarra Regional Airport, Albion Park.
At Tuesday night's council meeting, representatives from Greenacres Disability Services (which receives money raised), Shellharbour City Air Cadets, Shellharbour Tourism and Southern BiPlane Adventures spoke of the benefits the event brought to the Illawarra through promotion of the Shellharbour area, cash injection and aviation opportunities.
A petition of 1700 signatures was presented supporting the presence of the FA-18 Hornet military jet at the event.
Two submissions were also received objecting to the proposal, including one from Albion Park resident Sonya Mackay, who produced video footage of an FA-18 performing at an earlier air show to highlight issues with noise.
"The council is utilising my home and nearby houses as a playground for aircraft," Ms Mackay said.
Council staff said in an effort to address impacts, the event was being heavily promoted so residents were "suitably forewarned" and could decide whether to stay home, leave, or close doors and windows during the air show.
"The event will also be limited to daylight hours and the air show component is for one day," council planning team leader Cathy Bern wrote.
Ms Mackay said safety was of concern. However the council said all "recreational activities bear some degree of risk".
"The degree of risk and chance of an accident relate to the types of aircraft and several other variables," Ms Bern said.
"An application must be made to the Civil Aviation Safety Authority for the event and CASA considers matters such as safety, with regard to the location [and] type of aircraft amongst other considerations."