A proposed $650 million Foxwoods-managed resort casino for New Bedford's waterfront cleared a crucial step Tuesday as city residents overwhelmingly approved the proposal in a special election.

The referendum passed Tuesday with 73 percent voting in favor of it and 27 percent against, according to results posted on the city's website.

The vote was 8,355 to 3,040. About 21 percent of the city's nearly 54,000 registered voters cast ballots.

KG Urban Enterprises' plan calls for Foxwoods to manage a resort on a former power plant site. The project would preserve parts of the brick power plant, including its towering smokestack, as well as create a public harborwalk and pedestrian connections to the former whaling capital's historic downtown.

Voter approval was critical for the plan to advance in the competition for the state's third and final resort casino license, which is reserved for the state's southeastern region.

A plan for the Brockton Fairgrounds already has been approved by voters.

The state Gaming Commission hopes decide on a winner by the end of the year, though it has also reserved the right not to award the license.

New Bedford casino supporters, including a political organization backed by KG Urban, had touted the potential for the development to create nearly 6,000 jobs for a metro area that has among the highest unemployment rates in the state, at about 6.3 percent.

"New Bedford needs to make a change," said resident Robert Gifford after voting in favor of the proposed casino Tuesday. "We don't have many choices. Where else are we going to get the jobs and the revenue?"

But opponents feared a casino would only lead to more crime and traffic.

Leaders in the city's fishing industry have also openly worried about how the development might impact their trade, which includes one of the region's largest fishing fleets and a number of processing facilities and wholesale distributors located near the proposed casino site.

"The city has enough problems," said Sean Peters after casting his vote against the plan at a downtown polling place. "We don't need to add to that."

The vote in New Bedford was part of a critical week for Massachusetts' nascent casino industry: the state's first casino, the slots parlor Plainridge Park, opens in nearby Plainville on Wednesday.

Two other major casinos are expected to open in the coming years. MGM is developing an $800 million resort in Springfield while Wynn has proposed a $1.7 billion resort in Everett, near the Boston area.

Under a so-called "host community agreement" reached with New Bedford Mayor Jon Mitchell's administration, KG Urban has agreed to pay the city $4.5 million in initial payments if it wins the casino license.

The company would then pay the city at least $12.5 million annually once the casino opens, on top of paying real estate taxes and investing millions of dollars into public waterfront improvements and related environmental cleanup.

Foxwoods, the Connecticut casino company run by the Mashantucket Pequot tribe, has agreed to manage the operation.

The construction of the development would be undertaken by KG Urban, whose partners include former Foxwoods CEO Scott Butera.

"Voters today recognized that the deal we struck in March is a good one for the city," Mayor Mitchell said in a statement. "The proposed casino is on New Bedford's terms. That is why people gave it their support today."