Land at Muttontown, near Clyde, has been designated for a wastewater treatment plant.
The land had been designated for a wastewater plant by the Central Otago District Council (CODC) for many years but the designation lapsed about 10 years ago.
The council had applied to renew the designation.
Commissioner John Matthews heard the case last month and has granted the designation for a period of 10 years with conditions.
Mr Matthews said 32 submissions had been received and almost all opposed a wastewater scheme being built on the land in question.
He said he could give little weight to submissions which claimed the value of property in the immediate vicinity could drop by as much as 40% as the overall assessment of reductions in land values made by different valuers had been based on other factors as well.
"The Environment Court has decided that a drop in value of property is not, in itself, an adverse environmental effect which may be taken into account in matters of this kind," Mr Matthews said in his decision document.
He said he was required to take into account the adverse environmental effects themselves which could give rise to reductions in property values.
The specific tangible effects were visual - views of the site and inappropriate appearance in a rural setting.
Another tangible effect was the prospect that unpleasant odours would be generated on the site which could spread to other properties.
Mr Matthews said he could not take into account the perception by surrounding property owners of a stigma associated with properties near the site.
He had to look at the actual effects rather than the community's perception of what they could be if the proposal was to proceed.
He said he was satisfied a treatment plant could be built without detracting from the views and that odour would not be a problem.
Noise would not be an issue given the distance of the plant from any residential area and suitable conditions could be imposed to ensure that, Mr Matthews said.
The Central Otago district plan already provided for a separation of sewerage facilities of 150m for residential buildings.
Submitters have 30 working days to file an appeal with the Environment Court.
A group of Muttontown residents decided last year to oppose the renewal of the designation because the land-use around the area had changed from rural to rural residential, with several lifestyle blocks established. They were concerned about the visual impact on the nearby Otago Central rail trail, the visual impact from their homes, and the view of a wastewater plant from State Highway 8.
Other concerns centred on possible odour and noise from a plant.
