Plans had been submitted by the council for a mixed-use performance and entertainment venue with conferencing facilities on a 1.74-hectare site in Hull's city centre.
It was proposed that the space could be used flexibly, either as a concert auditorium, with a capacity of up to 3,500, or as a 2,000 square metre exhibition space with an 800-capacity conference auditorium.
The planned four-storey building proposed metallic cladding, coloured brickwork, glazing and metal panelling, as well as a green/brown roof for the main auditorium.
Officers had recommended the application be approved. The report said it was considered that the development had the potential "to act as a catalyst to the delivery of investment in the city centre" and "supports Hull as a world class visitor destination".
It added: "It is considered that the proposed design is successful in presenting a dynamic and distinctive contemporary architectural approach, and would deliver an eye-catching landmark and welcoming public destination."
However, Hull City Council’s planning committee last week voted against the proposals by five votes to four.
According to local press reports, councillors who voted against the plans raised concerns over issues including the proposed venue’s location and its capacity.
Stephen Brady, leader of the council, said: "I am incredibly disappointed with [the] decision by the planning committee. The plans for the Hull Venue have received considerable public support, are hugely important for the development of the city and will put us on the map as a location for major events, conferences and music concerts.
"The development is absolutely essential to making Hull a top visitor destination and is an integral component of our legacy planning following on from our year as UK City of Culture in 2017."
The council said it would resubmit the plans in the New Year.