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The planning authority returned a split decision on the Zapi Properties scheme, which originally consisted of a 20,000 square metre shopping centre, retail warehouses, offices, sites for a primary school and garda station and 260 new homes.
An Bord Pleanála green-lighted the construction of houses, offices, an enterprise centre, petrol station and car showrooms at the 80 acre site at Charlesland.
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However, the authority refused permission for the shopping centre and retail warehouses, which it said would conflict with national policy.
Planners said current policy "favours the siting of new retail development in town centres or edge of centre locations, it would have an adverse impact on the vitality and viability of the existing town centre".
The authority also cited the logistics of the scheme for its decision, insisting the shopping complex would be too far from the town centre.
Last year, during a public hearing, a number of objections were lodged against the scheme.
Pizarro Developments, which plans to build a rival scheme in Fassaroe, Bray, raised concerns over the project.
A decision on Pizarro Developments plan is due at the end of the month.
(PR/BMcC)
