The Council passed a proposal to develop the building on the Hillview site in the Crumlin Road area.
However, Sinn Fein described it as a "disastrous decision".
Housing spokesperson Caral Ni Chuilin said: "This is an area ranking high on deprivation indices and public bodies have a duty to invest in communities and not leave development of a site like this to the private sector alone.
"We don't need car show rooms and fast food outlets at Hillview, we need accessible amenities, community facilities and decent social housing for citizens in North Belfast.
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"A decent home is a human right, and tonight this right was denied to hundreds of families on the housing waiting list. Sinn Féin will be engaging with residents to determine what steps can now be taken to fight this decision."
SDLP north Belfast Councillor Paul McCusker said he was "disappointed" by the decision.
He said: "In the middle of a housing crisis, no more severe than in this part of North Belfast, we should be doing all we can to provide good quality homes that meet the needs of local people.
"The decision to approve Hillview for retail development, a model that has failed at the site before, is short sighted and flies in the face of what local people want and need.
"This is the perfect site for social housing development. There is a viable plan for development on the table. The needs of the people of North Belfast are once again being ignored. This is a dereliction of duty that we will continue to oppose."
(CD/LM)
