The broadcaster intends to change iPlayer from a 30-day catch-up service to make programmes available for 12 months as standard, with some available for longer.
All children’s programming will be available for five years under the proposals.
Ofcom said proposed changes to BBC iPlayer could deliver significant public value over time and could increase choice and availability of public service broadcast content and help ensure the BBC remains relevant in the face of changing viewing habits.
However, the watchdog added it remains concerned about the competitive challenges it would create, particularly for other public service broadcasters’ video-on-demand services, such as the ITV Hub and 4OD.
A statement said: “While we have concluded that the public value justifies the adverse impact on fair and effective competition we have identified, and the BBC can proceed with its plans, this is subject to certain conditions and guidance.
“Our conditions will help ensure that the new BBC iPlayer delivers future public value, and will mitigate risks to fair and effective competition.”
The BBC has already announced it will put box sets and new shows commissioned specially for the service on the new streaming platform BritBox.
The streamer will also feature content from ITV when it launches in the autumn.
Shows such as Love Island, Gentleman Jack, Gavin & Stacey, Victoria, Happy Valley, Broadchurch, Les Miserables, The Office and Benidorm will go on the service.