Applicant R Keene and Sons submitted an outline application to Tewkesbury Borough Council in May 2016, seeking permission to develop land in the village of Highnam.
Permission was refused in March 2017 when the council said the plan represented a "significant encroachment beyond the strong defined urban edge of Highnam into the surrounding rural landscape".
The developers subsequently appealed. A public inquiry took place in May this year and the appeal was recovered by the secretary of state in July.
Issuing his decision this week, James Brokenshire agreed with his inspector’s recommendation that the appeal be dismissed and planning permission refused.
In the application’s favour, the housing secretary said the council does not have a five-year housing land supply and so the National Planning Policy Framework's presumption in favour of sustainable development applied.
Brokenshire agreed with the inspector that "both the new homes and the economic benefits" of the proposed scheme carried "significant weight".
However, the "development would result in harm by disrupting the settlement pattern by extending the urban area into open countryside beyond a well-defined edge," he said.
"There would be harm to the settlement pattern, the landscape and the way it is experienced, and that the proposal would not have sufficient regard for local distinctiveness or contribute positively to a sense of place," he added.
The secretary of state concluded that the proposals were not in accordance with the area's joint core strategy’s policies protecting landscape character and also contravened policies in a neighbourhood plan addressing design and visual character.
"Taking into account the material considerations set out above, including that there is conflict with a recently made neighbourhood plan ... the adverse impacts of granting permission would significantly and demonstrably outweigh the benefits," he said.
Earlier this week, Tewkesbury councillors said they were minded to refuse plans for 850 homes on a greenfield site to the east of the town. Developer Robert Hitchins Ltd has lodged an appeal.
The same developer secured planning permission on appeal for two schemes in Tewkesbury in December last year after the council failed to determine one and refused permission for the other.
In January this year, Tewkesbury councillors rejected plans for 500 homes near Cheltenham after concluding that the scheme did not accord with the newly-adopted joint core strategy.