A planning inquiry starting on Tuesday was set to hear developer, Senescura Ltd's, reasons why the application should be approved and Shropshire Council's objections.
However Shropshire Council has revealed that the appellant has offered a £1.3m affordable housing contribution at a very late stage in the process.
In communications with the planning inspectorate, Shropshire Council's own planning witness Kelvin Hall has said the contribution to affordable housing means the "adverse impacts no longer significantly and demonstrably outweigh the benefits of the development".
At Shrewsbury Town Council meeting on Monday councillors voted unanimously to agree with Councillor Nat Green that the change in view was deplorable.
Councillor David Vasmer said that it appeared that Shropshire Council had "rolled over for a sum of money".
"The inquiry is still going ahead and the inspector is still expected to listen to the witnesses but the bite has gone out of Shropshire's argument," he said.
"Shrewsbury Town and Shropshire Council objected for good reason."
Conservative Councillor Alex Phillips said: "Is Shropshire Council really happy to sell our heritage down the river for little more than £1m? It is a drop in the ocean."
There was worry from Councillor Alan Moseley who said: "This could be a dangerous precedence for how other developers may deal with getting controversial applications through."
Others feared the building of the complex would attract rich retirees from across the country to move to Shrewsbury, putting more pressure on local NHS services and that the development would destroy an important environmental area.
Mayor Councillor Elisabeth Roberts said there were plans to move a pair of beavers onto land close by and said she was worried about how run-off of surface water from the development would affect this.
The town council agreed to put the Hencote planning application on the agenda for next week's planning committee.