By Inti Landauro 

PARIS--A three-year legal battle over plans to build a massive steel-and-glass building in the heart of France's manicured capital came to an end Friday as a high-court ruled the EUR500 million project can proceed.

Conseil d'Etat--France's highest administrative court--ruled that plans by luxury goods giant LVMH Moët Hennessy Louis Vuitton to revamp the iconic Samaritaine department store along the banks of the Seine doesn't violate the rules protecting the city's heritage. The most contentious part of the design: A plane of frosted glass that LVMH aims to erect, covering one of the building's facade.

On Friday, La Samaritaine's Chief Executive Jean-Jacques Guiony said the construction would now resume in the coming days, allowing the site to open in late 2018.

The long-running legal dispute pitted defenders of Paris' architectural heritage against developers and city officials who argued the project would be a boon for the local economy. Conservationists had filed a lawsuit to block the construction, arguing the modern flourish would disfigure the city's celebrated shopping thoroughfare, the rue de Rivoli.

But city officials and LVMH pushed back, arguing the project created a rare opportunity for expansion in the heart of one of the world's most cosseted capitals. Under the plans, the building site will include a luxury hotel, office space and subsidized housing.

"We need to know how to bring modernity to this city, and modernity is not the enemy of heritage," Paris Mayor Anne Hidalgo told reporters after the court issued its ruling.

"Nostalgia is a nice engine for a city, but creation is also a good one, " she added.

Alexandre Gady--an architecture historian and the president of the Society for the Protection of Landscapes and Aesthetics in France, which brought the lawsuit against the project--said the ruling set a dangerous precedent for preserving Paris' historic center.

"It's all about which city we want to live in," Mr. Gady said. "We don't oppose modernity, but it must respect the homogeneity of the capital's center."

The project was first conceived after La Samaritaine was forced to close in 2005, because it wasn't up to the latest building codes. In 2010, LVMH came up with a plan to restore the famed art-deco building--located just a stone's throw from the Louvre museum--and merge it with neighboring buildings.

Paris authorities approved the project back in 2012, but in November a Paris court, acting on Mr. Gady's lawsuit, ordered LVMH to suspend the project.

Write to Inti Landauro at inti.landauro@wsj.com

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