Dublin City Council (DCC) has not given up on turning College Green into a pedestrian plaza and will draw up revised plans to present to An Bord Pleanala (ABP) next year.
The council will also implement emergency traffic plans in this area of the city on health and safety grounds, and has decided against applying for a judicial review into the board's decision.
DCC's initial plans were rejected in October over traffic management issues.
Planning chief Dick Brady announced yesterday that Dublin City Council will not pursue a judicial review.
However, Mr Brady said that the council will file a new application to pursue the project in 2019.
"The council will move in the new year to lodge a new application to An Bord Pleanala for the plaza and traffic management measures, having regard to the board's decision," he told a council meeting last night.
Mr Brady added that until then, the council will work on changes to ensure the safety of those in the College Green area, and "the efficient operation of public transport".
It is understood that traffic plans will come into effect in the coming months but there are concerns among many councillors that DCC chief executive Owen Keegan and Mr Brady will push through these traffic management changes without any consultation.
It is within the remit of the council executive to make traffic changes without having to go to city councillors first.
Lord Mayor Nial Ring told the Herald that any changes must not dissuade the public from using buses or taxis.
"They have to look at it innovatively and practically and not in a way to choke the city centre," Mr Ring said.
Independent councillor Mannix Flynn welcomed the decision but said significant changes needed to be made.
"I think it's very sensible, and I think the public would want a resubmission in relation to the plaza. Nobody out there, that I spoke to, doesn't want a plaza. They all want a plaza," he said.
Sinn Fein councillor Seamas McGrattan said it was important that the judicial review route wasn't taken as it would have been unnecessarily costly.
Transport Committee chair Ciaran Cuffe said: "We can't leave things as they are and a new plan will hopefully address ABP's concerns and revitalise the city centre."