Planning permission has been refused for the controversial plans to redevelop parts of the Cobblestone pub in Smithfield in Dublin.
Locals and staff had complained that the proposed hotel on the site would have meant the loss of other cultural spaces such as music classrooms.
Two protests took place in the city last month against the plans, while Tánaiste Leo Varadkar also said the plans should be refused.
In their decision, Dublin City Council planning authorities said removing part of the building that makes an "important contribution to the cultural offering in the area" would set an "undesirable precedent".
They said: "It is considered that the proposed nine-storey over basement development would be overbearing and significantly out of scale and character with the prevailing architectural context, and would represent substantial over-development of this highly sensitive site.
"It is considered that the proposed new development... would seriously injure the visual amenities of the area, thus being contrary to the proper planning and sustainable development of the area."
Green Party TD Neasa Hourigan has welcomed the decision, saying it’s down to the "people power" of the campaigners who got involved to save the pub.
She said: "We saw marches, but also a huge number of people took the time to make observations.
"People want to protect their community and the cultural spaces that they have.
"I think the refusal is absolutely a testament to the time and effort people took."
The Cobblestone is known for its trad sessions and is one of the capital's best-known surviving traditional pubs.
Under the plans, the put itself would have remained as part of the new development.
However, it was feared the back room of the pub - often used for live music - would be lost.
The proposals had been criticised as "cultural vandalism".
