Plans for the West Way shopping area in Botley would have seen the existing shopping precinct demolished.
Developer Doric Properties proposed to build a supermarket, 100-bed hotel, six-screen cinema, 525 student homes and a Baptist church.
The company said it had not decided whether it will appeal against the decision.
Simon Hillcox, of Doric Properties, said: "We're obviously disappointed with the outcome.
"We are now going to take some time to review and understand the decision before we decide on our next steps."
Caroline Potter, from West Way Community Concern, which campaigned against the plan, welcomed the decision by the Vale of White Horse District Council.
"We are delighted. Common sense, democracy and justice have won out," she said.
The group said 2,200 people had signed a petition opposing the redevelopment.
Hundreds of campaigners opposed to the development formed a human chain around the site in protest in October.
A £100m shopping and student housing development in an Oxford suburb has been turned down by councillors.