Owenstown, named after the philanthropist Robert Owen, was the idea of The Hometown Foundation. The charity planned to build 3200 homes near New Lanark, to be run by a community co-operative. It claimed it would create up to 10,000 jobs.
Robert Owen was the man behind New Lanark, a town built in the 1700s for the benefit of mill workers and now a Unesco World Heritage Site.
The Owenstown project would have covered 400 acres of a 2000-acre site near Rigside.
However, South Lanarkshire Council unanimously turned down the application after hearing it would be contrary to planning policy.
The application, first made in 2009, was deemed "significantly contrary" to the area's development plan and rejected on a number of grounds, including the scale of the proposed development.