McDonald's received resource consent from the Dunedin City Council for a restaurant in Hartstonge Ave late last year, but a condition restricting opening hours prompted a rethink by the company.
Nearby residents had opposed the plan because of the effects of noise, traffic, glare and lighting.
The company decided not to appeal the council's decision to the Environment Court.
In April, a McDonald's spokesperson said the condition meant extra due diligence about the viability of the business was required, as the reduced hours would have an impact on its viability.
There were rumours at the time the company was looking for a new site.
A McDonald's spokeswoman said yesterday the company was "still working through plans for Mosgiel".
"However, I can confirm that we remain committed to opening in Mosgiel."
She declined to confirm or deny the company was looking for a new site.
