Rugby union's Sale Sharks remain committed to returning "to our home", despite Trafford Council withdrawing support for a new £100m stadium.
The club, currently based in Salford, announced plans in June to move to a council-backed sports village in Sale.
Council leader Andrew Western said while there was a "desire" to see the Sharks move back, the authority had now withdrawn support for the scheme.
Sharks owner Simon Orange said a return remained a "long-term ambition".
The Crossford Bridge Community Sports Village plans would have seen a floodlit 4G pitch, running track, grass pitches, community pavilion and children’s climbing and activity centre built on playing fields on the edge of the town.
'Even more confidence'
However, the Local Democracy Reporting Service said thousands of people urged the club and council to find a different site and had raised concerns about the loss of green space, extra traffic, noise and potential pollution.
Members of grassroots sports teams which also use the site - including Sale United and Old Altrinchamians football clubs and athletics club Sale Harriers - also said they were concerned for their futures.
Mr Western said that as a result, "we have taken the decision not to support the proposal".
"We share with Sale Sharks a desire to see them back in Sale in the future if a suitable site can be found," he added.
Mr Orange said fans had "been extraordinary in the support they have shown throughout this initial consultation" and the process had "given us even more confidence in our future ambitions".
"We have made no secret that our long-held ambition is to return our elite men's and women's teams to our home town of Sale."
"Although disappointed by this political decision... we look forward to delivering a solution in the future."