Wigan Council planning committee has voted to maintain land at Wigan Enterprise Park for employment use and reject a plan for housing by developer St Modwen.
St Modwen applied for planning permission to build 325 houses at land off Seaman Way, Ince. The industrial park totals 30 acres and is home to 25 businesses.
Planning committee members refused to support the plan but the final decision on whether the plan can go-ahead will be made at a public inquiry.
Nick Whittingham, land director at St Modwen, said: "We are disappointed with the council's decision to reject our proposals for much-needed family homes in Wigan. We firmly believe that our proposals for the redevelopment of the redundant industrial buildings at Wigan Enterprise Park to high quality family homes, extensive areas of public open space, and the opening up of the culvert water course to encourage wildlife, are the most sensible uses for the site.
"Since purchasing the estate in 2001 we have had to demolish over 140,000 sq ft of unlettable redundant buildings. There is no long-term future for employment on the site and our redevelopment proposals represent the most viable uses."
The planning committee agreed that the loss of Wigan Enterprise Park would result in the unacceptable loss of crucial employment land in the borough. The council said the proposal was contrary to its commitment to creating more land for business in the borough. Currently the council has a shortfall of at least 40 hectares, or 98 acres, on its target of 200 hectares, nearly 500 acres, of land for business and employment purposes.
The council added that new roads around the site would attract further tenants.
The public inquiry is set to take place in the spring.