Permission has been granted for the development of 106 apartments at the site of the Mother and Baby institution in Bessborough, Co Cork.
The decision comes following an appeal to An Coimisiún Pleanála.
Plans to develop the site have faced years of opposition from campaigners and survivors.
The Commission of Investigation into Mother and Baby Homes estimated that 900 babies died at the site.
Earlier this year, developer Estuary View Enterprises was granted planning permission by Cork City Council to build apartments at the site.
Bessborough Mother and Baby Home Support Group and Cllr Peter Horgan of Labour lodged appeals with An Coimisiún Pleanála.
Today’s decision has been described by survivors and advocates as very disappointing.
The Bessborough Mother and Baby institution operated from 1922 until 1998/99 under the Sisters of the Sacred Hearts of Jesus and Mary.
Thousands of women and children passed through the institution over those decades.
While the Commission of Investigation into Mother and Baby Homes concluded that over 900 children died, only a small number of burial locations have been conclusively identified, leaving the whereabouts of many children’s remains unknown.
Survivors’ groups and campaigners have argued that parts of the land may contain undocumented burials and that any development could permanently disturb evidence before all investigations are complete.
The Labour Party said there is still time for Fine Gael and Fianna Fáil “to right this wrong”.
In a statement, it said a Compulsory Purchase Order of the site is possible.
It has urged the Government “to act without delay to ensure that the Bessborough site is recognised and preserved as a site of conscience”.