Plans had been submitted to demolish the Ritz Bingo Club to make way for the development of 14 new homes.
However, the council voted against the development due to the architectural and historic significance of the hall.
County and district councillor Sandy Angrove said: "This site is far too valuable to be pulled down.
"Although the appearance of the Ritz is stark, art deco is an important and distinctive style of architecture and there are not many significant examples of buildings of this style in Penwith," she added.
The Ritz, which was built in 1936, became a popular bingo hall in the 1960s, following its original status as a cinema.
However, the numbers of players at the hall has dropped significantly over the past few years, partly due to competition from online bingo and the lottery.
It is also predicted that the forthcoming smoking ban will badly hit the Ritz after July.
Though plans to develop the site into new homes has not been approved, the council still feel the Ritz should be put to a different use, with a new theatre as well as new office space among the proposals.
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