Phillipa and Darren Bain applied to remove the 20m heritage-listed pin oak tree from their King St property, citing safety concerns as they felt the tree was at risk of damaging the property and the property nearby through falling limbs.
The scheduled tree had grown "prodigiously" over the past three decades, a report from their arborist said.
At a hearing held in September, the council considered two submissions, both of which asked for the tree to be removed.
The Dunedin City Council’s independent hearings panel declined the application.
Concerns about the damage the tree could cause on nearby property and powerlines could be addressed by simply pruning it regularly, the panel said.
"The tree is significant in terms of its contribution to the wider area," the decision said.
"It is a mature and very good specimen of pin oak, which can be seen from public viewpoints, in particular King St."
The decision also said neither the council’s landscape architect nor the parks and reserves officer supported the proposed removal of the tree.
"The effects of its removal on the amenity of the wider area cannot be mitigated in a comparable matter.
"The parks officer considers the tree to be a good, healthy specimen , which did not present any immediate health or safety problems."
The parks officer also said at the hearing that "no credible evidence" had been presented proving the tree was a safety risk.
A representative for Mr and Mrs Bain told the hearing he did not consider the removal of the tree to be detrimental to the community, and the tree had grown too large for its location.
"Mosgiel would still have leafy streets and no-one wanted to see a bare suburb, so that would not arise."
Ms Bain confirmed the matter was now going to the Environment Court, but declined to comment further.
