The draft local plan, which was submitted to the Planning Inspectorate for examination in March 2018, had outlined a housing target of a minimum of 9,770 new homes from 2011-2028, or 575 homes a year.
In March this year, the then Tory-controlled council voted to release 14 sites from the green belt in its emerging local plan to accommodate an extra 2,010 homes in the hope of maintaining its five year housing land supply.
However, Labour snatched control of the council from the Conservatives in this month's elections, having campaigned heavily against proposed green belt releases in the strategy.
At a full council meeting this week, 26 members voted in favour of removing the plan, with no votes against and 17 abstentions.
The vote came despite officer advice warning members over the "high risk" of the move.
Following the vote, Labour council leader Chris Emmas-Williams said: "At last night's full council meeting we delivered four of our election manifesto promises, the biggest one to terminate the flawed Tory local plan."
The statement said the incoming Labour administration had asked the inspector examining the emerging plan if it could go back to the position the plan was at before the previous regime had added the 14 green belt housing sites.
But the statement said the council "could not get any assurance we could do that hence the decision we had to take".
In the run-up to this week’s vote, Amber Valley’s Conservative MP Nigel Mills supported the bid to ditch the plan, telling a local newspaper that "no plan is better than a bad plan".
A report going to this week’s meeting, prepared by Julian Townsend, the council's executive director of operations, warned councillors that withdrawing the plan and starting again would mean that the council would be unable to demonstrate a five-year housing supply for a number of years.
"Housing development will still happen, but the council would be vulnerable to the approval of unplanned, ad-hoc development, which may not deliver the benefits achievable through planned growth in accordance with an up-to-date plan," it said.
The council could face significant costs in defending appeals for refusing permission on sites vulnerable to ad-hoc development, "including greenfield sites within the countryside", the report said.
In addition, the council would need to use the government's new standard methodology to assess housing need to inform any new plan, it said.
The costs of preparing a new plan are "difficult to estimate but the council, based on previous experience, could expect costs…to be in the region of £1.4m over a five year period, plus any legal costs," the report said.
It went on to say that the "risk of withdrawing the local plan at this stage is assessed as high", and further raised the possibility of ministerial intervention.
"Based on 15 letters already sent by the secretary of state to other local authorities for failing to progress their plans, it is not considered that the council has grounds to argue there are exceptional circumstances why the plan has not been progressed," Townsend said.
The meeting also adopted a policy to insist on a 30 per cent minimum affordable housing policy for future planning applications.