The application by Pinewood Studios to build a 100-acre set on a green belt in Buckinghamshire has been turned down.
Pinewood Shepperton's £200m plans included up to 1,500 homes - a mix of apartments and houses, a school, theatre, cinema and sports facilities.
The film set would have represented streets in New York, Paris and Venice and was part of Project Pinewood.
South Buckinghamshire council said the green belt should be protected and rejected the plan on Wednesday night.
Councillor Jacquetta Lowen-Cooper, Chairman of the planning committee, said members felt the development would have caused "significant degradation" to the local environment and quality of life of local residents.
"[It] would also have set a precedent thus potentially undermining the council's future ability to resist inappropriate green belt developments elsewhere," she added.
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"However it is also important to stress that this decision should not be seen as anti-Pinewood."
The development would have featured backdrops, including a Venetian canal, a Roman amphitheatre and a Tudor marketplace for period dramas.
The houses would have been among the streetscapes and were to include about 400 affordable homes.
The studios estimated the project would have provided about 630 new jobs, rising to 960 jobs by 2022.
The BBC has reported that Andrew Smith, Group Director of Corporate Affairs at the studio, said: "This project is of national significance and of great benefit not only to our community and region but also to the UK and its creative industries.
"We remain committed to the vision of this project and to developing and sustaining UK creative industries at Pinewood for the future."
He added the studios would now review the decision.
Pinewood, which has a market value of £70m, was set to take on a development partner for the project and would need to issue new debt or equity to finance it.
It had agreed a joint venture with Aviva Investors to develop the Shepperton Studios.
The planning refusal is a set-back, especially after it had previously had to adapt its expansion after opposition from residents in neighbouring Buckinghamshire villages during two years of planning.
A lake designed to look like Lake Como has been dropped after fears that it would disrupt local wildlife. A medieval castle has also been scrapped.
Recent films coming from the studio include Bond's Quantum of Solace, Brideshead Revisited and the Dark Knight.
See: Pinewood Expansion To 'Rival Hollywood'
(BMcC/GK)
