The council said the development was "in the wrong place"
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Plans to build 2,600 houses on the Dunsfold Park airfield in Surrey have been turned down by Waverley council.
Councillors said the development was "in completely the wrong place".
They also said the housing was for workers on the site and "failed to meet the needs of local people who are unable to access or afford housing".
Jamie McAllister, from Dunsfold Park Ltd, said the developers were "disappointed but not surprised" and were considering what to do next.
Waverley councillors considered the plans for the site, which is home to 108 businesses, at a meeting of the joint planning committee on Wednesday.
Horsham and Chichester councils, both in West Sussex, had objected to the scheme together with Guildford council in Surrey.
Councillor Peter Isherwood said many of the environmental proposals, such as energy resource and waste management, were "innovative and exciting".
But he added that the development was "undesirable expansion in a mainly rural area", and the limited transport and traffic infrastructure "could not support a development of this size".
The Dunsfold Park airfield site is home to 108 businesses
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He also said residents on the site would be "heavily reliant on the private car", leading to increased traffic and noise.
Under regional housing targets, Waverley council must build 250 homes a year until 2026, but there was sufficient land in the borough to meet this need without using the Dunsfold Park site, he added.
In a statement, Mr McAllister said: "Having spent six years researching, consulting and liaising with the local community and Waverley about the site's future we are disappointed, but not surprised, by Waverley's decision to turn down the planning application for Dunsfold Park.
"We are now considering our options."
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