The New County Hotel was built in 1840 but is currently empty
Plans to turn a 170-year-old Grade II listed building into a members-only "sex club" have been rejected by Gloucester City Council.
A scheme to convert the former New County Hotel in Southgate Street was rejected by a 6-5 vote.
Developers hoped to make it into a club for "people with alternative sexual lifestyles".
Councillors said the idea "does not reinforce Gloucester's special character and sense of place".
The councillors had been instructed they had no right to veto the scheme on moral grounds.
But the committee was told that more than half of the Gloucester City Centre Community Partnership objected.
Martyn White, of Gloucester Civic Trust, wrote: "I personally have strong moral objections to such a place existing at all.
"To site it in the historic city centre, opposite one Christian church and next door but one to another would make a mockery of our heritage and rob Gloucester of all credibility to visitors."
Plans included a "fetish room for adult enjoyment".
The planning application states: "The private members' club would comprise an exclusive venue for people with alternative sexual lifestyles such as gay men and women, bisexual men and women, transvestites, cross-dressers, cross-genders, variables and swingers."
Formerly known as The Ram Inn, the New County Hotel was built in 1840 and extended in 1890.
Until the 1980s it was regarded as Gloucester's premier hotel.