Israel's Defense Ministry approved the construction of 90 housing units in the West Bank settlement of Beit El.
The final approval was given Sunday and comes following the recent U.S. announcement that President Obama would be visiting Israel and other places in the region this month. The United States has urged Israel not to build in the territories.
The apartments are part of a deal set eight months ago between the Israeli government and settlers that saw the evacuation of the residents of the Ulpana outpost.
Yaakov Oppenheimer, director-general of Peace Now, called the timing of the approval "unfortunate."
"The advance of such plans will likely cast a shadow on Obama's visit," Oppenheimer told Army Radio on Monday.
Building is set to begin in a few weeks.