Members of the Kirkby Area Residents' Association have been campaigning since 2007 to stop a new Westerman Homes development at the Mowland's Site - between the A38 and Pinxton Lane.
Campaigners claimed that the development would "change Kirkby forever" and said that it would have a "negative effect on infrastructure", with plans outlined for industrial units as well as the large number of houses.
And after pressure from the campaigners and councillors, developer Westerman Homes has agreed to pull its application - with the site now protected from development for 20 years.
Mick Slack, a Kirkby resident and chairman of the residents' association group, said it is "fantastic news" for the area.
He said: "There are too many people to thank so I'll just thank the people of Kirkby for standing together against the plans.
"We campaigned against this proposed development because we simply couldn't cope with 1,800 houses and associated industrial units.
"Once this land is built on - it will be gone forever. Lost to future generations of Kirkby residents.
"We are so pleased that we have safeguarded it for the next 20 years from development."
Councillor Jason Zadrozny, leader of Ashfield District Council, supported Mr Slack and the association in their campaign.
He added: "We are obviously delighted that Westerman Homes have listened to our case. This wouldn't have been an easy decision to make - it will cost the developer hundreds of millions of pounds to give up on this site.
"This is the best possible outcome for the people of Kirkby and the surrounding areas. People told us that the Kirkby community had no chance against the might of a huge developer.
"Working with the Kirkby Area Resident Association, we have shown that David can beat Goliath. This is a victory for people power.
"This potential development was huge - from Pinxton Lane to the A38.
"It would have gridlocked Sutton Road and had a hugely adverse impact on schools like Ashfield School. This is a great day for Kirkby."
Developer Westerman Homes has been contacted for a comment.