An administrative court in nearby Bautzen overturned an injunction imposed by a lower court in August and ruled that construction of the 635-meter (2,083-foot) bridge across the Elbe river could proceed, despite the possible threat to the habitat of the lesser horseshoe bat.
However, the court also ruled that a strict speed limit of 30 kph (19 mph) must be put in place for the night-time hours, in order to lessen possible harm to the bat.
The bridge has already been the subject of a long-running dispute with historical preservationists. UNESCO's World Heritage Committee has said it will so degrade the integrity of the Elbe valley landscape that the city risks being removed from its list of world heritage sites.
Dresden is often referred to as the Florence of the Elbe for the baroque architecture that gives it a distinctive skyline.
UNESCO in June gave German authorities four months to come up with an alternative plan for the bridge, but Saxony's state government angrily rejected the ultimatum, pointing to the results of a referendum in which Dresden citizens voted to support the bridge.
Construction of the four-lane Waldschloesschen bridge had been scheduled to begin Aug. 13, but that was blocked when environmental groups invoked the bat - an endangered species - to obtain an injunction against work starting.