Property Developer Cala Homes has been pushing to build the new development on the 230 acre site at Barton Farm for 14 years.
The plans have now been approved by Communities Secretary Eric Pickles.
He had initially turned them down but reconsidered the firm’s case when it launched an appeal.
Winchester and Chandler's Ford MP Steve Brine described the approval as "bitterly disappointing.
"Cala Homes have very deep pockets and have relentlessly pursued Winchester over many years until they got what they wanted", the Conservative MP said.
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Mr Brine said the approval of the plans would make the city a "less comfortable place" to live.
In a rather poignant statement, the Tory MP said: "We will get used to it, and not too many years from now we'll no doubt struggle to remember how it looked before, but a special piece of the landscape setting of Winchester will be gone forever."
But Robert Millar, group land director of Cala, said: "Local people will benefit greatly from this decision.
"It will be a major contributor to stimulating the local economy and creating long-term jobs."
Residents have continually rejected the proposal, worried the city's roads, schools and services would be unable to cope.
Keith Wood, leader of Winchester City Council, said: "We argued strongly about the application, but we have been overtaken by events.
"The council now needs to ensure that the development of this site generates all the promised benefits to the community."
Of the 2,000 homes, 800 will be social housing for people on the city council waiting list.
(IT)
