The proposal, which would have seen up to 400,000 homes built across parts of Suffolk and Cambridgeshire, will not be taken forward through the Government's New Towns programme and no development corporation will be established.
The council has consistently highlighted the importance of ensuring that any significant development is appropriately planned, supported by infrastructure and services, and takes account of the views of local communities.
Councillor Tristan Gale, Suffolk County Council's Cabinet Member for Planning, Devolution and the Fire and Rescue Service, said:
"We welcome the Government's decision not to proceed with the Forest City proposal. This was a development of an unprecedented scale which raised significant concerns about its potential impact on Suffolk's countryside, communities, infrastructure and agricultural land.
"Suffolk County Council supports sustainable growth and the delivery of new homes where they are needed, but it is essential that development is planned in the right locations, supported by the necessary infrastructure, and reflects the needs and views of local communities.
"This decision provides clarity for residents and allows us to continue working with partners on plans that support Suffolk's future while protecting the county's unique character and environment."
