The Irish Georgian Society has lost its bid to stop three houses being built in the grounds of Traverslea, a six-bedroom Victorian house on nearly four acres at Glenageary.
The society says that the development would ruin the integrity of its walled garden.
An Bord Pleanála granted planning permission to developers Bernard Costelloe and Liam Maye to build the three houses and refurbish Traverslea and its coach-house and stable buildings and to widen the gateway to the existing house.
The late 19th century house on Glenageary Road Lower is a fine three-bay, two-storey redbrick with an ionic porch.
The Irish Georgian Society says that the house is not only of architectural interest, it also has historic significance, as the home of the landscape painter Nathaniel Hone: the house was built in 1880 for his sister Ivy Hone.
The society says the development will alter the character of the walled garden, and points out that Dún Laoghaire-Rathdown County Council has lost many of its walled gardens in the past "giving this survivor even greater significance".
But the developer says that the term "walled garden" normally indicates a formally laid out rectangular garden on an axis either with the main house or as part of the landscaped gardens "which is not the situation in this instance, where the triangular shaped garden lacks any formal relationship with the main house and is not overlooked by any of the reception rooms".
An Bord Pleanála ruled that the development would not adversely affect the character or setting of the protected structure. The developer paid €5 million for Traverslea, which was also the home of businessman and honorary consul for Malta Neil Judd until his death in October 2001.