The planning application committee turned down the proposals which had been brought forward by South West London and St George's Mental Health Trust.
The outline scheme included 839 homes, a new hospital and 3,700 square metres of mixed retail, commercial and business space.
The plan also involved the demolition or alteration of several of the site's listed buildings, the removal of the golf course and the creation of a new public park.
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A previous planning application for the site was rejected by the committee in March last year. Councillors ruled then that the scheme was too vast, out of keeping with the surrounding area and would exacerbate local transport problems.
The Trust's revised scheme has been scaled back but councillors determined that the impacts on the site's protected green space and surrounding roads were unacceptable.
Planning applications Chairman Cllr Nick Cuff said: "Some of our concerns with the previous proposal have been addressed but the scale of development is still excessive. A scheme of this size would place huge demands on an already overstretched transport network and the Trust's offer to improve bus services and junction layouts would not do enough to offset higher usage.
"Local tube and rail services are already seriously overloaded and surrounding roads would struggle to cope with the extra traffic - especially the Burntwood Lane / Trinity Road junction where rush hour gridlock is already a daily frustration.
"We want to see new homes and new health facilities on this site, but only on a scale that can be safely accommodated by local infrastructure."
(CD/KMcA)
