The Green Room is a place where Angels can control reality. It is unclear if it is located in Heaven. Zachariah refers to it as a "Green Room" - which is the term used for a room where performers wait before going on stage. Dean also refers to it as "the beautiful room" 5.18 Point of No Return
The room visually references the room in which Dave wakes up in the final segment of the movie 2001: A Space Odyssey which is called "Jupiter and The Infinite Beyond" and which represents a realm beyond the mortal.
Zachariah takes Dean here as he is waiting for Sam to kill Lilith, and therefore free Lucifer. His plan is that Sam will be taken as Lucifer's Vessel, and the Michael will use Dean as his and kill Lucifer.
The Green Room appears to resemble a luxury hotel suite. Zachariah and Castiel can cause doors and windows to appear and disappear, and when Dean tries to break through the wall, it is instantly repaired. When Dean first enters the green room, the paintings on the wall are bright, pastoral scenes. Later when Dean confronts Zachariah, they are dark surreal scenes of Hell.