The local authority says the land is designated for creating large scale strategic employment.
Planning permission has been refused for a 99 house development in Offaly.
It was due to be built on the Arden Road in Tullamore.
Two reasons have been given by Offaly County Council for their decision.
The local authority say the land in question is designated for creating large scale strategic employment and it's their view that allowing this application to proceed would infringe on the potential to develop the hospital as a teaching or university facility or with a bio technology park in the future.
They also deemed that the design for the development is flawed due to being dominated by roads, a failure to establish a sense of place and a poor quality of urban architectural design.
For those reasons, the planning department decided it would be contrary to proper planning and sustainable development for the area after a four month decision process.