In her letter to Gov. Jerry Brown, Sebelius said she was granting approval to California because of the "substantial progress the California exchange has made ..."
The approval was granted on the condition that California demonstrates it can meet exchange requirements and comply with deadlines and regulations.
Covered California plans to have its exchange up and running in time for open enrollment on Oct. 1. Health coverage would take effect Jan. 1, 2014.
The exchange's executive director, Peter Lee, said Thursday's approval means California is hitting its marks.
"Rightly, the federal government is saying, 'You've got all your ducks in a row. You're ready to go and we want to make sure you're going to be ready on Oct. 1,'" Lee said.
He said the exchange will now move ahead on outreach and marketing to reach California's diverse population, negotiate contracts with health plans and come up with ways to improve the quality of medical care in the state.