Majority plant owner Southern California Edison late last year asked the California Public Utilities Commission to approve withdrawing $461m from an existing trust fund to continue decommissioning the closed nuclear station.
In 2017, SCE estimated it would need $166m to perform the work. Since then Edison has said delays in the fuel-transfer programme moving the waste from wet to dry storage and approval of a permit from the state Coastal Commission contributed to the higher cost estimates.
The Public Watchdogs consumer advocacy group filed a formal protest to the application late last year, asserting that SCE had not properly explained why it needed more money than it had previously estimated.
Regulators initially placed a hold on the funding, but have now announced in a letter they will approve the application.
SCE said the decision would allow the company to proceed safely with decommissioning the former station.
The San Onofre nuclear station, located between Los Angeles and San Diego, has three pressurised water reactors units. Unit 1 started commercial operation in 1968 and was permanently shut down in 1992. Units 2 and 3 began commercial operation in the early 1980s and were closed down in 2013.
The full dismantling and remediation of the San Onofre site is expected to take over 40 years, according to SCE.
