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Outline planning permission for up to 700 homes has been granted after an appeal.
The Planning Inspectorate issued a notice today approving the properties at Barton Hill Drive, Minster, Sheppey.
The decision said all necessary supporting infrastructure, including land for a shop, community centre, internal roads, footpaths, cycleways and parking was also allowed.
Open space, play areas and drainage and utilities were also given the green light for the site near the Island's rugby club.
An award was made meaning the council will have to pay some of the applicant's costs for the appeal.
Land owner SW Attwood and Partners referred the application to the Planning Inspectorate after Swale council turned down the plans last year.
It followed widespread opposition with more than 200 letters of objection being submitted.
An inquiry opened at Swale council's HQ, Swale House in East Street, Sittingbourne, on Tuesday, February 4, and lasted for four days.
The inspector, Martin Whitehead, visited the site on Wednesday, February 5.
Before the inquiry opened, Swale council removed two of its four reasons for objecting to the proposals.
It no longer wanted to rely on the impact of the development on roads or the lack of affordable housing as reasons for denying the application.
Instead, it focussed on concerns over the character and appearance the new properties would have on the surrounding area and its effect on the setting of Grade-II listed Parsonage Farmhouse.
"The council should therefore pay all the appellant's costs of the appeal."
Justifying the decision, Mr Whitehead said a large part of the application site was allocated in Swale council's local plan - which is a blueprint showing what is planned to be built and where.
He also gave permission for SW Attwood and Partners to claim costs from Swale council for "unreasonable behaviour" during the appeal process.
Mr Whitehead said: "It is hereby ordered that Swale Borough Council shall pay to SW Attwood and Partners, the costs of the appeal proceedings described in the heading of this decision limited to those costs incurred in dealing with the appeal on the grounds of the reasons regarding affordable housing... and regarding highway and traffic impacts."
Ward member for Queenborough and Halfway, Cllr Cameron Beart (Con), attended each day of the inquiry.
He said: "I am devastated by the decision, this development will fundamentally change the landscape of Sheppey over the next 20 years and have a detrimental impact on our infrastructure.
"This site was removed from the local plan and put back in by the planning inspectorate and now the inspectorate have approved a development plan that they accept in their findings does not accord with the local plan allocation they forced upon us.
"I would also like to say how disappointed I am that those members, those coalition members who boldly stood in elections in May and December last year claiming to residents that they would stand up for the Island and would fight development to unseat Conservatives were noticeable in their absence."
He also praised council officers, adding: "I have seen many comments already on social media referencing brown envelopes and backhanders and that kind of comment I simply find insulting to our staff."
Partner at SW Attwood and Partners, James Attwood, said: "We are obviously delighted with the decision to grant planning permission.
"The development can now deliver much needed housing. Clearly the Inspector accepted the proposals that were twice recommended for approval by the council officers.
"Contributions will be made to improve local roads, a new primary school at Rushenden, shops on the site and expansion of a local surgery.
"Unfortunately, the cost of completing the Lower Road Improvement Scheme has increased as a direct consequence of the council’s refusal of permission.
"Those costs, together with the costs of appeal awarded by the Inspector because of the council’s unreasonable behaviour, mean that the contributions to local infrastructure are less than they might otherwise have been."
A Swale council spokesman said: "We are disappointed that the planning inspector did not agree with our reasons for refusal due to the landscape and listed building impacts.
"During the course of the appeal, however, the appellant did agree to further highways mitigation which led to us dropping that reason for refusal, so we are pleased that we have secured further highway improvements as a result of this appeal."
