Campsfield House detention centre in Kidlington will not be expanded after the Home Office withdrew the proposal it emerged today.
Immigration and Security Minister James Brokenshire MP said Home Secretary Teresa May made the decision after an independent review of people in detention.
The decision came after Cherwell District Council announced last month at a planning committee that a decision on the expansion of Campsfield House was being deferred.
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In a letter to Nicola Blackwood, James Brokenshire MP said: “The Home Secretary has asked officials to initiate a detailed piece of work on future requirements, to take account of recent and potential future legislative changes.
“In light of this, the Home Secretary has decided to withdraw the planning application for the proposed expansion of Campsfield House."
Ms Blackwood said: "Finally, common sense prevails.
"I am delighted that the Home Secretary is withdrawing the planning application.
"These plans would have made Campsfield one of the largest detention centres in Europe and it was clear to me that the case set out by the Home Office did not justify building on Green Belt land.
"And of course there were serious problems with the design of the building and how it would work in practice."
There are 276 beds at the centre in Langford Lane.
Campaign to Close Campsfield spokesman Bill MacKeith said: "We are relieved."
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