Dublin city councillors have voted to make the Oscar Traynor Road development 100% social and affordable housing.
Councillors had previously rejected a plan to allow Glenveagh Properties to develop 853 homes on the State-owned site in north Dublin and sell 50% privately.
Council officials had warned that the rejection of this deal could delay the delivery of homes for five years.
A plan subsequently drawn up by a cross-party group of councillors to have the tenure mix 40% social, 40% cost/affordable rental and 20% affordable purchase was passed during a full council meeting.
The council's Chief Executive Owen Keegan said councillors were "reneging" on their original decision to accept a public-private project that had since taken four years of work.
"This will have long-term implications for the city council," he said.
However Labour Cllr Alison Gilliland, chair of the Housing Committee and the cross-party group, said the housing situation had changed since 2017.
"It is our duty and responsibility as councillors to respond to that change for young people struggling with high rents and locked out of the housing market," she said.
Fianna Fáil and Fine Gael councillors abstained saying they would like to see more affordable purchase homes but that they would not oppose the plan.
Councillors from Sinn Féin, the Green Party, Labour, Social Democrats, People Before Profit and most Independents voted for the report which set out the tenure mix and also called on the Government to increase the site services fund from €50,000 to €100,000 per unit.