Plans to create a delicatessen and salumeria at 138 Harrogate Road, which would involve renovating three residential flats and a shop, went before the council’s North and east plans panel.
Campaigners told the meeting the plans would take away affordable housing from the area, and that the site was of historical importance.
But a spokesperson for the applicants argued the plans were supported by council officers, while the applicant himself gave a description of what the business would provide.
Penny Sanders, a Chapel Allerton resident of 43 years, said: “We object strongly at the loss of affordable accommodation. The site currently provides three affordable homes. It is in a quiet residential backwater.
“There is no justification for change of use from much needed accommodation to a restaurant seating 100 people.
“It is a 16th century timber-framed building that lies in the heart of a conservation area.”
Another resident, Mary Cousins, said: “Most of my neighbours have made written objections. To say this is a quiet residential area is understating it.
“We would welcome a delicatessen to have a few seats, but that is not what this is.”
A spokesman for the applicant told the meeting the property is in the centre of Chapel Allerton, and that it was the preferred location for eating establishments.
Applicant Tony Salaris then told the panel: “I would like to start by letting you know what a salumeria is – use your imagination. If you start to think about a counter and see Parma ham and salami from Italy.
“On the side, there will be a vintage sliding machine. You will see a parade of cheeses from Italy and England together. People can take it home to eat with their family.
“An open kitchen where my mum is going to work, she will prepare the same food she used to give to me as a kid.
“Imagine the smell of the fresh bread and Italian coffee grounds in the morning. I have always had this dream.”
He was then halted as his time for speaking ran out.
Coun Kevin Ritchie (Lab) said: “I do like Tony’s passion. I’m sure he will make a successful business that will add to the thriving businesses of Chapel Allerton.”
The panel granted planning permission, at which point Mr Salaris gave a celebratory fist-pump.