Camden Council has lost its lengthy court battle against the 'over-development' of a greenfield site next door to Mount Annan Marketplace.
The site's developers, Sunland Group, fought the council in the Land and Environment Court for the right to build 139 terrace homes on the Main Street block.
The court ruled in the developer's favour.
Land and Environment Court commissioner Smithson stated in her final judgement that minor amendments were made to the original development plan.
She also addressed resident concerns about the look and feel of the development.
"Whilst the development may be out of character with residential development in the vicinity, this is because that development, in which the objectors' live, comprises single residential dwellings in a suburban context," Commissioner Smithson said.
"It does not comprise multi-dwelling housing in a B2 zone which would be expected to, and will have, a different and denser character."
The 1-5 Main St, Mount Annan: Fairer Outcomes For All Facebook group has been campaigning against "over-development" of the site since 2014.
A spokeswoman took to the page to voice the group's disappointment with the court's decision.
"We all knew something would eventually get built on this site at some point, and after five years of hard effort by the community and council, we would have hoped it'd be something aligned to what sits around this key central part of our town," the post read.
"However, in skimming through the judgement, it appears the (non-local) Commissioners of the Court think that we should be subjected to the same profit-driven, sub par and poorly designed schlock which plagues so many of the areas which we strive not to be.
"In any case, the umpire has given their decision and we must now live with the consequences.
"Best of luck to those fellow residents who live in and around the block, and to the rest of us who must pass by/park/shop next to it every day."
The post also thanked people who made submissions and voiced their concerns with the proposal.
This was not the first time the controversial site has landed the council in the Land and Environment Court.
The block of land, now owned by Sunland, was previously owned by Dyldam Group Projects Pty Ltd.
Dyldam submitted an application in 2014 to build nine four-storey precincts that would house 256 units, a 550-space car park and off-street parking.
Residents and the council strongly opposed the development due to traffic, noise and parking concerns.
The fight ended up in the Land and Environment Court where the case was ruled in council's favour.
Sunland Group purchased the 5.5-hectare greenfield site in November 2016.
The developer's proposal, to be called Montaine Residences, will be made up of 139 two or three-bedroom terrace homes within walking distance of a central park.
Sunland managing director Sahba Abedian told the Advertiser last year the proposal represented a sensitive and respectful planning approach, where leading architecture was combined with landscape design.
The Advertiser has reached out to Camden Council and the Sunland Group for comment.
Read the full judgement here.