The decision comes after a council report criticised the hotel’s design as ‘architecturally inappropriate’ and relating 'poorly to the adjoining stadium’.
But Brighton & Hove Albion described the ruling as ‘astonishing’ given the hotel had been designed by the same architects that created the stadium .
The club said in a statement: “The club's board was extremely disappointed by the planning committee's decision, and are of the view that the planning committee did not properly take into account the huge social and economic benefits for the city and the support it would have given to the club.
“The board does not agree that the hotel's design is not in keeping with the stadium, or that it would detract from views of the stadium.
“The proposed development was also designed within a strictly controlled budget and the design reflected the requirements of a range of partners.”
The plans included a restaurant, bar and 24-hour deli and were expected to create 82 jobs, providing a £5.8m boost to the local economy.
Albion had hoped that the hotel would open in September 2017 and had already entered in to a franchise agreement with Aloft's parent company Starwood Hotels & Resorts.
The club’s board said the development was now ‘on hold’ while it consulted with its partners about how to move forward.
BigHospitality has contacted Starwood for further comment.
Starwood currently operates two UK hotels under the Aloft brand, at London’s ExCel centre and in Liverpool, and is opening its third site at East London’s Tobacco Dock in 2017.