Health chiefs say Warneford Meadow will not figure in new planning proposals to develop land around the Warneford Hospital in Headington.
The NHS trust behind the hotly contested scheme to create "a student village" on one of the city's green sites confirmed the meadow had been excluded from a revised application to be made in the new year. It now plans to build only on the Warneford playing field and land around the Park Hospital.
More than 1,000 people signed a petition objecting to the development of the meadow. A Friends group is pressing to have the land registered as a town green.
Residents were given the news at a meeting addressed by the chief executive of the Oxfordshire and Buckinghamshire Mental Health Partnership NHS Trust, Julie Waldron.
But Sietske Boeles, of the Friends of Warneford Meadow, said: "This is only a battle won. Getting it registered as a Town Green remains crucial, otherwise the Department of Health will doubtless cast greedy eyes on the £11m or more that could be raised by selling it for development."
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