"It is not possible to demolish a large portion of a substantially intact theatre building and retain its heritage value as a theatre building,"Commissioner O'Neill found,though she described the architect's plans as"seductive and dramatic".
Mr Kingston said that he respected the decision and would instead turn the Roxy into a 24-hour pub,nightclub and poker machine venue with capacity for almost 2400 people - although he didn't specify a timeline.
"The paradox is that no further approvals are required from the council for the alternative option,"Mr Kingston said,adding that option would not require any structural alterations to the site.
"All the approvals are in place. I've retained the hotel license and the pokie permits,"Mr Kingston said.
Les Tod,vice president of the Parramatta branch of the National Trust,who campaigned to stop the redevelopment of the Roxy said he did not want that to happen.
"That didn't work,"Mr Tod said of the period in which the Roxy had been a pub until 2014.