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The planning inspector has rejected an appeal put forward by private school Eton College to build a multi-million pound development in Chestfield.
Bosses at the college had hoped to to build up to 290 homes, including 200 houses and 90 flats, and a new primary school on the Bodkin Farm land south of the Old Thanet Way.
It was also seeking approval for a convenience store, gym, restaurant, community building, offices and care home buildings.
But the decision made by the independent planning inspector on Friday means the development will not be going ahead and backs up Canterbury City Council's original verdict on the application.
The city council's planning committee had refused the application in November 2014.
Council spokesman Rob Davies said: "Naturally we are pleased that the independent inspector has supported our decision to refuse the application.
"The proposal was unacceptable on a number of grounds, including harm to the Green Gap, highway capacity, affordable housing, the impact on protected sites and the new school being unjustified."