There were no objections to the plan and West Devon Borough Council’s affordable housing team gave its support as did Drewsteignton Parish Council.
Supporters said it would help keep the village “vibrant and alive”.
Mr Saunders agreed to a condition that the property should always be occupied by a local person who was in need of a home and could not afford the current market prices in the area.
DNPA director of spatial planning Dean Kinsella told the meeting the plan was “unique” and would not open the door for anyone with a derelict building on the moor.
“Every site is different,” he said. “This is a single unique position.”
Members voted unanimously to let Mr Saunders go ahead.
DNPA chairman Mark Dracup said: “This is exactly what Dartmoor needs.”