The outline application was refused by the Council's strategic planning committee in December last year despite a report (51-page / 918KB PDF) by the Council's planning officers recommending that permission should be granted.
The committee said that, although a housing need in Truro and Cornwall had been established, the proposed development did not "relate positively to the existing townscape and landscape" and would result in "unacceptable adverse visual impact to the detriment of the intrinsic character of the City and its countryside setting".
It said that this was contrary to the aims and intentions of its local plan policies and of the National Planning Policy Framework (NPPF).
The planning officers had said in their report that the Council was unable to demonstrate a five year housing land supply as required by the NPPF and that the proposed development would make a "valuable contribution towards addressing this requirement".
The officers also said that the proposal would help address the Council's transport requirements, including land and funding for a redesigned junction at Arch Hill and Green Lane to improve capacity, traffic flows and provide safe pedestrian crossing facilities.
Rob Nolan, Cornwall Council member for Truro Boscawen, said: "Over a long time we've tried to protect the setting of Truro – it's a city within a bowl," said Cornwall Council member for Truro Boscawen Rob Nolan after the committee's refusal according to local reports.
"We all talk about austerity and the difficult economy yet the members clearly voted for no housing yet housing brings prosperity, jobs and security so I am very disappointed in their decision and will be appealing," said Persimmon managing director Simon Perks.