A Surrey council is claiming victory after it challenged a government order that could have meant 2,000 homes being built on green belt land.
Guildford Borough Council issued its challenge following the publication on the South East Plan in May last year.
The Labour government said in October that it would not resist the challenge.
But this week the council said the final details had now been agreed, and that the government would pay all its legal costs.
"This is a victory for the council and local residents," said Councillor Jenny Wicks.
"We have always recognised the need for more homes in Guildford, but not to the extent proposed in the South East Plan.
"Our successful legal challenge means that local concerns have now been heard and taken into account when planning the future of our borough."
The council's announcement follows the Queen's speech on Tuesday, which said the government would "abolish regional spacial strategies" - effectively scrapping the South East Plan.
The plan, which set out the government's 20-year development strategy for south-east England, had been under discussion since 2004.
Housing was a major issue during the general election campaign, with both the victorious Conservative candidate Anne Milton and the Liberal Democrat candidate Sue Doughty opposing the South East Plan.
However, the Labour candidate Tim Shand said during the campaign his party widely supported the plan.
Character of borough
The council said it would now try to work out what the removal of the housing building targets would mean for the borough.
"We will need to take account of the changes in national planning policy following the announcement in the Queen's speech," said Ms Wicks.
"Development will continue to take place in Guildford borough if it complies with the council's local planning policies.
"But it is reassuring that the South East Plan housing targets, which many felt would have prejudiced the character of the borough, no longer apply."