Planners have approved the building of 120 student flats opposite the Westgate Towers.
The controversial development will sit on the site of the Barretts showroom and workshop on the corner of St Peter’s Street and Pound Lane.
Barretts is leaving Canterbury city centre after a presence of more than 100 years and is relocating to Broad Oak Road.
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Managing director Paul Barrett, a Freeman of Canterbury, said the application is important not just for his business and its 400 employees, but is of wider economic benefit to the whole city.
“This is not just a student scheme, it has office space and tourist accommodation,” Mr Barrett told Canterbury City Council’s planning committee.
“We are part funding our relocation with this and if we don’t move, we would lose our franchise.
“All good things have to come to an end and the time has come for Barretts to leave the site.
“And in order to meet the requirements of Jaguar Land Rover, we have to leave.”
Barretts’ application was approved by the planning committee at its meeting in the Guildhall tonight.
It voted eight in favour of the application with three abstentions and none against.
The proposal to convert its site to student accommodation has been met with opposition from those who argue there is enough in the city already.
Others have said that there are better use for the site, including housing.
But city council planning officers recommended the scheme for approval, pointing out it complies with policies.
Conservative councillor and former Lord Mayor of Canterbury said: “Our planners should stop thinking about student accommodation and start thinking about real people.”
Lib Dem Nick Eden-Green, another ex-mayor, added: “Struggle as I might, I can’t find any valid grounds to reject it.”
Cllr Eden-Green has previously blamed the Local Plan for the proliferation of purpose built student accommodation.