Developer Bromford want to get on and build 12 "affordable" homes and 14 supported living flats at the old Reman Sports and Social Club in Albert Road, in Sundorne, Shrewsbury.
Permission was granted last year for a proposal which would have meant providing a replacement bowling club at the town's sports village.
But Shropshire Council's Northern Planning Committee was told that the sports village option was no longer available. A site at Greenfields bowling club had been secured, but because it was so different to the original plans, the brakes were put on the permission being carried out.
Councillors on Tuesday were asked to reconsider the decision in the light of the new proposed agreement.
David Kilby, secretary at Shropshire Playing Fields Association, objected to the plans, saying that proposals would be "unfair" in either taking a bowling green away from Sundorne or in the club at Greenfields sharing their facilities.
"We believe the residents of both Greenfields and Sundorne communities would be the losers if such a proposal were to be allowed and that the only beneficiaries would be the applicant," he said.
"There is no security of tenure for the Reman club at Greenfields," he said.
Mr Kilby also said the club would be "short-changed" by a £67,500 difference in developer contribution.
But developer's agent Stuart Thomas, of Berry's, said there had been "much regret" about the inability to provide a new green at the sports village at an estimated cost of £150,000.
"It is not our fault that the plug was pulled," he said.
He added that an £85,000 contribution was decided by an "independent assessment".
And the developers, he said, were keen on moving forward with the delivery of "much-needed" affordable housing.
He added that the club accepts the situation and has a pot of money.
"We want to get on and provide the affordable housing," he said.
Councillor Mark Jones said that the Greenfields club would benefit.
Councillor Ted Clarke said he had "only a little whinge" that the Severnside club had been "vacant for two or three years" with a long history and greens that had been used by county teams.
But the committee was told that the Severnside club was not considered to be in the north of Shrewsbury.
The committee voted by eight in favour, with none against and one abstention, to approve the plans and new heads of agreement.
The Reman Sports and Social Club closed in late 2015 after the committee ran into financial difficulties. The club, which had been running for decades, was known in the town for its sporting achievements.
It had two bowls teams, a cricket and football team, eight snooker teams – four of which were in the first division - and also ran dominoes and bingo evenings as well as other entertainment.
Chairman Dave Southerton said at the time it closed: "It is an important part of the community and people are going to be very sad to see it go.
"I had to make a very difficult decision and had to present it to the membership. But it was a unanimous decision that the club should close."