A team of experts had submitted its report to the committee a fortnight ago.
Dr S K Dave, of the National Institute of Occupational Health, who was also a part of the experts' team, said the ship can now be dismantled at Alang.
''The ways to dispose off the embedded asbestos are being discussed at a meeting of the Gujarat Pollution Control Board and Gujarat Maritime Board officials in Gandhinagar today,'' he told UNI.
Environmentalists had earlier opposed the ship breaking, as it contained more than 1,200 tonnes of toxic asbestos. But the apex court had permitted the Blue Lady, now owned by Haryana Ship Demolitions Pvt Ltd, to anchor at Pipav port in June, but had said it could not be scrapped until a technical committee cleared it.
The team that included members from GPCB, NIOH and the Gujarat Maritime Board assessed the pollution risk posed by asbestos on the ship and submitted a report to the committee, which gave its clearance on Tuesday.