The council opposed plans by Gladman Developments to build up to 140 homes in Baxter’s Fields off Summer Street.
Gladman appealed against Stroud District Council’s refusal to allow the development to be built.
Last week a Government planning inspector rejected the appeal.
In his report the inspector stated: “There is evidence that the site forms an integral part of the Slad Valley and the relationship of that valley with . . . the surrounding countryside has more than local significance.”
Town councillor Kevin Cranston, chair of the consultations committee, said: “We are really delighted that the Planning Inspector has found in our favour and this beautiful part of the country is safe for the future. Now we must turn our attention to helping to protect Rodborough Fields.
“The Neighbourhood Development plan will give greater say to local people in future developments once it is in place. DO get involved, visit the town council office to find out how.”
Town councillor Simon Arundel added: “The developers argued that in the absence of a local plan delivering a five and a half year supply, Baxters Fields should have no protection under the controversial National Planning Policy Framework (NPPF).
“The Planning Inspector, however, has recognised that though just outside of the AONB (Area of Outstanding Natural Beauty), this is a “valued landscape” and the harm which development would cause outweighed any merits of the additional housing. This is good news for the longer term safeguarding of our much cherished Slad Valley.”