Councillors rejected controversial plans for 199 homes in Waltham following objections from local residents.
Members of the planning committee on North East Lincolnshire Council voted down the plans by seven to one.
The proposals submitted by Cyden Homes would have seen the development take place on Brigsley Road in the village.
Residents objected to the plans on the grounds of traffic safety at the entrance to the site and concerns over flooding.
Around 148 letters of objection were submitted against the proposals.
Further objections were lodged by parish councils in Waltham, Brigsley, and Barnoldby Le Beck saying that the plans would have an adverse impact on the village and offer no opportunities for public transport.
Council officers recommended approval of the plans and said that the application was part of the North East Lincolnshire local plan.
Councillor Phillip Jackson, who tried to remove the proposals from the local plan, said he was pleased with the committee’s decision.
“I have expressed concern with the inclusion of the site in the local plan and the sustainability of it and its affect on Waltham village,” he said.
“So I was very pleased that the committee has taken on board all those issues along with concerns about drainage, and has decided to reject the application.”
He added that the developer needs to go back to the drawing board and submit something that is “less intensive” on the village.
Margaret Quantrill, member of the Waltham Residents Action Group, said that residents worked hard to prove the site was not sustainable.
“The field itself floods, I have lived near that field for 50 years and it has always flooded,” she said.
“That is a big concern for me and the infrastructure of Waltham cannot cope with more than 400 cars.
“I do not believe that with a new housing estate that they are going to have more than two cars per household.”
Despite the rejection, the site will remain allocated for housing under the local plan passed by councillors last week.