A 1950s-era derelict service station in Canowindra's heritage Gaskill Street area is set to be demolished to make way for a modern building.
Cabonne Council agreed at its meeting on Tuesday to support a development application for the changes.
Councillors supporting the plan said the $1.5 million development might create jobs in the town and would replace an "eyesore."
Cr Jenny Weaver said she approved the plan.
"It's more welcoming than what's there at the moment," she said.
"What is there at the moment is an eyesore."
However, Cr Cheryl Newsom said the replacement did not fit a heritage area.
"It is quite a modern building located between two residential premises," she said.
"I believe it is going to be out of character and not fit within the confines of what Gaskill Street has been set up for."
Council approved the DA by eight votes to two.
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