Despite a warning that the land was regularly waterlogged, planners have given Barratt Homes the go-ahead for 24 new houses at Swanmore.
However, Winchester City Council have imposed strict conditions to ensure adequate drainage.
They have also told the developers they must reduce the height of some of the homes from three to two-storey to minimise the impact.
Conservative member for Swanmore and Newtown, Frank Pearson, told planners of his concerns over the homes, which will be built on a former horse paddock between Spring Lane and Spring Vale.
"This site is a wet area and there is a seasonal pond. It is a natural water storage area that appears every time Swanmore receives heavy rain."
The developers intend to use a "herring-bone" drainage system to send excess water into a ditch on the western side of the plot.
Mr Pearson said he was concerned the ditch was "inadequate" to deal with rainwater and underground springs at the site.
He added that the ditch eventually drained into land near Ludwell's Lane between Swanmore and Waltham Chase, which was also prone to flooding.
After several members, together with Swanmore Parish Council, expressed concern, it was agreed that four proposed three-storey homes should be reduced to two.
Liberal-Democrat member, Brenda Hatch, argued that they were out of character with the village.
"The fact that they've put rooms in the roof makes them higher and I think it would stick out like a sore thumb."
Her views were shared by fellow Lib-Dem, Charlotte Bailey.
"I'm really not happy with the height of these buildings; they're definitely against the village design statement."
Planners also called for trees to be left on the northern boundary to protect the privacy of residents in Russett Close.
Mr Pearson asked for reassurance that a set of railings near the site in Spring Lane, which prevent access to Spring Vale, would remain. He said he was worried that if the railings were replaced with bollards, motorcyclists would use the route as a short cut.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article