The air space over Medlow Bath village and Grose Valley walking tracks will remain clear after a proposal to run commercial activities out of Katoomba Airfield was knocked back by the state government.
Derek and Floyd Larsen had applied to run recreational flights, including helicopters, from the airfield through their company, FlyBlue.
When the plans were first open for public consultation, more than 1,500 submissions were received, with 85 per cent in opposition.
The department of planning, industry and environment rejected the proposal, citing "overwhelming community opposition" and concerns about noise, protecting Indigenous heritage and pollution of water supplies.
But the Larsens complained about flaws in the consultation process and a review was ordered. The department also undertook to re-evaluate the lease application.
Last week the department issued a statement: "An application by FlyBlue for a lease to operate a commercial airfield, including helicopter flights, at Medlow Bath has been refused, after failing to provide a valid planning pathway - a requirement under the Environmental Planning and Assessment Act 1979.
"The company's temporary licence to access the site will also be revoked and it will be required to vacate the site within 28 days."
FlyBlue said in response: "The NSW Government asserting that FlyBlue has failed to establish existing use rights and therefore a planning pathway, is to dispute established facts that are so self-evident as to be irrefutable. The NSW Government has relied on existing use rights to issue lawful tenure over Katoomba Airfield since 1991."
It said the airfield presented a "rare opportunity to greatly improve the economic and safety fortunes" of the Mountains.
The Blue Mountains Conservation Society, which campaigned hard against the proposal, was thrilled with the news, said the president, Tara Cameron.
"But we are not quite there yet. This news is a significant step towards having the land added to the National Park and its future safeguarded. And we remain committed to seeing that happen.
"If the airfield is added to the park, it will ensure appropriate management and protection is in place and that it will always remain available for fire-fighting and fire prevention purposes."
The Department of Lands agreed in the 1960s to include the site within the National Park when the then lease expired in 1988.
The Department of Land and Water Conservation recognised that position in March 2000.
Council's CEO, Rosemary Dillon, wrote to the environment minister, Matt Kean, in September, urging him to incorporate the land into the National Park, saying that doing so would "align with the previously expressed position of the NSW government".
Ms Cameron praised the community for its role.
"None of this could have been achieved without the incredible support and commitment of both the local and broader community in raising awareness, with petitions, submissions, letters, phone calls and determination, of the importance of our World Heritage National Park," she said.
Stephen Caswell, from the Medlow Action Group, said: "Whilst we appreciate that some commercial interests may be disappointed with the ... decision, MAG believes it is an emphatic win for residents and businesses concerned with noise pollution and impacts on the environment and waterways of the Blue Mountains."
He added that he hoped that the government "will now consider comparing the efficiencies of the proposed 19 km tunnel option from Katoomba to Hartley against its environmentally devastating above ground option for the Great Western Highway duplication".
