Iglo Foods Group Limited had appealed against the decision of Kingston-upon Hull City Council to refuse the plans.
Previous proposals for the site, at Hessle Road, Hull, were also rejected at appeal but this decision was overturned at the High Court in 2013.
The latest application proposed a mixed use development of five hectares of residential land comprising up to 185 units and 2.1 hectares of employment land.
In his decision letter the inspector said that one of the main issues in the case was the effect the proposed development could have on employment land supply.
He said that, in relation to the National Planning Policy Framework, it had "not been shown that there is no reasonable prospect of the site being used for the allocated employment use."
He also said that a policy in the council’s local plan "indicates that the council will seek to ensure an adequate supply of land for employment development over the period of the City Plan to meet strategic requirements and demand for employment land", and this policy "remains particularly relevant".
The inspector also found that the council could demonstrate an up-to-date 5 year housing supply "and this diminishes the weight that I attach to the need for housing."
Concluding, the inspector said that "taking into account the non accordance with the development plan, the important role employment land can play in the economic growth of the city and the benefits of having available a high quality large site in the Western Corridor area of the city" he could not recommend approval for the scheme.
"I conclude on balance that these factors far outweigh the need for, and benefits of, the proposed residential/employment development, even accepting the positive benefits these would also provide in terms of sustainable development, and the weight to be attached to this as promoted by [the NPPF] do not swing the balance in favour of the proposed development", the letter said.