Business leaders in Newry are poised to apply for a judicial review of what they called an "utterly absurd" decision to allow an out of town development.
Newry Chamber said it was "bitterly disappointing" that Environment Minister Mark H Durkan had granted full planning permission to the Hill Partnership's plans for a multi-million pound retail hub nearly two miles outside Newry.
They claim the centre at Carnbane Way, which is expected to house anchor tenant Asda plus 70 industrial units, will damage the city's economy.
Mr Durkan, however, has defended his decision as the "right" one for Newry.
The chamber, along with the Northern Ireland Independent Retail Association (NIIRTA) said the decision was a U-turn on Mr Durkan's ethos of "championing a town centre first" approach to large retail applications.
In a joint statement, Deborah Loughran, president of Newry Chamber and NIIRTA chief executive Glyn Roberts said the development "would have a devastating impact on Newry city centre".
'It was not long ago both the Minister and his party were championing a town centre first approach to large retail applications," they said, asking "why the U-turn"?
They said that during a recent visit to Newry, the Minister was shown alternative city centre sites – with existing planning permission.
"As the Minister has totally rejected any compromise, we have no choice but to consider seeking a judicial review".
Chamber chief executive Orla Jackson said the objectors had called for a public inquiry into the matter, but that his decision to approve means that will not go ahead.
But Mr Durkan said: "I am satisfied that, on balance, the potential economic benefit of the development and the proposed measures to mitigate and enhance the landscape and heritage value of the overall site, outweigh the potential retail impact on the city centre."
He said the "town centre first" approach was not "a moratorium on all out of town retail-led development. Each application is treated on its merits and I believe that economically and environmentally this is the right decision."
A spokesman for the Hill Partnership said the decision was "excellent news for Newry and the surrounding area in terms of the employment opportunities" but declined to comment on the issue of the judicial review.
He said 95.7% of people questioned in a "scientific" survey by Lucid Talk had said they were in favour of the plans.