The trust that runs the museum, and the facility's supporters, have raised concerns about the proximity of the rear wall of the supermarket to the museum's fitting shop.
But Progressive Enterprises, the company behind the development, countered its building would be an improvement on what was already on the site.
Progressive Enterprises wants to build a Countdown supermarket on the South Dunedin site, a non-complying activity under the council's district plan, as it would be large-scale retail activity in an industrial zone.
Yesterday's hearing was the third, and last, day of arguments for and against the application.
The company has argued the solid backdrop to the museum was something that could not be avoided if the supermarket was to be viable, and noted there was already a large building (Roofing Solutions) on the boundary of the museum site.
But opponents told a resource consent committee, of city councillors Richard Walls and Kate Wilson and commissioner David Benson-Pope, the wall would irrevocably change the setting of the museum and block sunlight during winter months.
During a submission from the New Zealand Historic Places Trust, archaeologist Peter Petchey, a trustee of the gasworks museum, told the committee he had been involved with the facility for 19 years.
The site had always had an "open character", with a large building setback.
"A very large concrete slab wall within 4m of the fitting shop is therefore out of character, has no historical precedent, and dominates the much smaller historic building.
"The setting of the museum is therefore irrevocably changed, with an intrusive, overpowering and unsympathetic modern intrusion."
The Roofing Solutions building was "admittedly, already intrusive", but the supermarket wall would be longer, higher, and the effects correspondingly greater.
Mr Petchey criticised the applicant for "not seeing fit" to meet members of the trust to discuss the issue, meaning the trust had been "left on the out".
Historic Places Trust Otago-Southland area office regional archaeologist Matthew Schmidt said the gasworks museum was a historic place of both national and international significance, and both the city council and the New Zealand Lottery Grants Board had provided funding, the latter having approved $400,000.
The Historic Places Trust recommended a heritage impact assessment be produced, a setback of the supermarket wall of no less than 2m, and restrictions on the height and angle of the wall.
Progressive Enterprises counsel James Gardner-Hopkins responded to what he had heard over the last three days, and said representatives had met the museum trust and the Historic Places Trust.
The building would not "physically impact" on the museum site, but form a backdrop, one considerably better than what was there.
Mr Gardner-Hopkins blasted evidence from competitors Foodstuffs and Pak'n Save, which he said made a mockery of new rules stopping trade competition as an argument against a resource consent.
Cr Walls adjourned the hearing, and said deliberations would begin on Monday.
