The council has designated the 11.5 hectare patch of land, off New Lane in Huntington, as green belt in its draft local plan – but that plan is yet to be approved by the government.
Local councillors said residents were being “ignored” by Barratt.
Peter Morris, development director at Barratt, said: “We have decided to appeal the application because there is a desperate need for new homes in York and the city’s local plan is still shrouded in doubt with uncertain timescales. There is still no certainty that it will succeed.
“This is a truly sustainable site and will provide a significant amount of affordable housing for people in York.”
Under the plans, 90 of the homes – just under a third of the development – would be classed as “affordable” housing, according to planning documents.
Keith Orrell, Liberal Democrat councillor for Huntington and New Earswick, said: “Local residents are being ignored by Barratt, who are continuing to try to force a major development on what has been and is proposed to be designated as green belt land.
“The green belt forms an important part of the special open and agricultural character of the setting of our historic city and the Huntington area.
“We are all aware of the need for more housing in the city but this should not come at the loss of the green belt or put major pressures on local traffic.
“In this area drainage and flooding are particular problems and any development would impact on the area’s biodiversity as well as the capacity of local health services and schools.”
Coun Orrell said the Huntington Parish Council had also rejected the use of the land for housing.
He added: “To try to force through this application citing delays in the approval of the local plan further demonstrates Barratt’s disregard for the local community and objections which have been expressed by countless residents since the application was submitted.”
“I am glad this administration is progressing a balanced local plan which will go a long way to address the local pressures in our housing market, including the regeneration of brownfield sites, and at the same time, guaranteeing the protection of the greenbelt and York’s natural beauty.”
City of York Council was contacted for comment.