Permission to develop land at HMS Ganges at Shotley Gate, Suffolk, was granted in 2015. The site had last been occupied in 2001.
Woolverstone Parish Council wanted to overturn Babergh District Council's decision.
Lord Justice Keith Lindblom at the Court of Appeal in London ruled there were no grounds to appeal in law.
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People in Woolverstone, which is on the main road to Shotley Gate, had argued Babergh had not taken into account the impact the rise in traffic would have.
Lord Justice Lindblom said there was "no compelling reason" for an appeal to be heard.
The Royal Navy left the site in 1976 and it was last used as a police training base.
Under the plans, there will be a 60-bed nursing home, a hotel, retail and commercial units and a commitment to restore the listed ceremonial mast.
An appeal to prevent 285 homes being built on a derelict former naval base has been lost.