The iconic Two Bears Hotel can be demolished to make way for a 'bland' bulky goods shop, planning councillors have ruled.
While 15 jobs are set to be created, residents fear traffic problems and the loss of historic architecture - with 14 letters of objection.
But planning chairman Mick Castle said residents are to blame for the loss of the Pasteur Road hotel, as they rallied against a wedding marquee application some years ago.
He told last week's meeting a petition from High Mill Road residents had blocked the marquee bid, and land to the rear of the hotel was subsequently sold to a Felixstowe developer.
This paved the way for Heritage Mews.
'They said it would be rowdy behaviour, but we have weddings in the town hall without any trouble,' explained Mr Castle.
'I think the Two Bears Hotel was badly served as if they had got that application it would probably still be in business now.'
Locals said that they were not opposed to a new use, but wanted the facade preserved.
Resident Geoffrey Harrison told the meeting: 'Pasteur Road is already anonymous enough and the loss of this Edwardian building would impoverish Southtown and Cobholm, which already have little to distinguish them.
'The proposed building seen in the artists' impressions seem bland and could be anywhere.'
But Chris Marsden, of applicants Citygate Developments, said retaining the frontage would involve 'quite prohibitive' costs.
He said it would need temporary supports while the rest of the building was demolished, a new steel frame to strengthen it, new foundations, new insulation to meet building regulations and many other aspects including concealed gutters.
He said the new shop would need a 'highly visible presence' not consistent with the existing facade.
'I honestly don't know who the occupier is and even if I did I wouldn't be at liberty to tell you due to commercial confidentiality,' he added.
The applicants did consider the empty unit by the side of Matalan, but said that there was not enough floor space.
A previous bid to turn the Two Bears into a YMCA hostel was dropped last year.
Penny Linden, councillor for Southtown and Cobholm ward, said she had received email objections to the new plans from as far afield as Australia.
'I've many memories of the Two Bears myself,' she recalled.
'It's a great building but I think we've missed a move somewhere in Cobholm.
'We had the Maltings, we've got Shipley's and the Ice House, we could have been a nice conservation area but we've not valued what we've got. It's a gateway and it just needs some gentle tender loving care.'
She added: 'What we're being offered here is pretty mediocre in design.'
She was saddened by the loss of historic buildings, like the former Rocket pub which is now Pizza Hut.
But Charles Reynolds, councillor for Ormesby ward, said: 'I find it impossible to share Cllr Linden's romantic view of it, as it's an absolute disgrace as you enter town.'
He added: 'I truly believe the building has gone too far and there's obviously no interest within the leisure trade.
'The new building, boxy as it is, would certainly improve that gateway into town.
'I've some sympathy about the facade and remember driving coaches into the old Southtown Station, but it's simply not practical for that building.
'It's time to put the old dog down.'
The new store would have 26 car parking spaces, and the 15 jobs would comprise 12 in store and three in delivery.
The planning application was approved at a meeting at Great Yarmouth Town Hall, with seven councillors in favour and three voting against the proposal.
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