The historic Crook Inn at Tweedsmuir will not be turned into flats.
Councillors rejected the plan for housing at the Crook Inn
In January councillors decided that the property should be put back on the market for four months before it would decide on the proposal for the site.
Owner James Doonan declined to remarket the pub and instead sought a decision from Scottish Borders Council.
Members of its Tweeddale Area Committee unanimously voted against the proposal and sided with 155 objectors, despite officials recommending approval.
Inverwest Ltd wants to convert the Tweedsmuir building into four flats and a house.
A community trust set up to save the inn has also expressed an interest in buying and running the business.
However, the current owner insists that it is no longer viable to run as a pub and hotel.