St. Luke's Church in Brinscall is set to be flattened and four executive houses built in its place.
The Quarry Road building was last used back in 2018 before being sold to an individual who initially sought planning permission to convert it into a dwelling.
However, earlier this year, plans emerged to demolish the local landmark - which dates back to 1887. As the former Church of England building is not listed on any local or national register, it can be knocked down without planning permission under "permitted development" rights.
Chorley Council's planning committee has now approved the housing which will occupy the plot.
A villager, who did not want to be named, said residents' "delight" at the conversion plans has now turned to despair.
"We were all so pleased that somebody was planning to turn it into a family home, because it was starting to look a bit dilapidated - and it really would have made a beautiful place to live.
"It was a shame that it wasn't actually able to remain open, because it was so well-used by the community.
"But now we'll be losing part of the heritage of the village as well - the church really is a part of Brinscall.
"There will also be an environmental impact, because there are red-listed birds living in the grounds," the resident added.
A community Facebook page for the area contains dozens of memories of the services, clubs and Sunday school which were held in the church down the years. A petition opposing the housing plans for has attracted almost 600 signatures.
Several members of the planning committee also expressed their disappointment at the forthcoming demolition.
"I never like to see any building that's structurally sound demolished to make way for modern residential properties," said Cllr Martin Boardman.
"It's just unfortunate that land is expensive and developers look for the most profit out of a site."
Cllr Gordon France, whio said that his family had worshipped in the church for over 100 years, bemoaned the change of plan
"I wish the applicant had done what he originally wanted to do and turn it into a single dwelling," he said.
However, Christopher Donald - the agent for the application - stressed that the issue of demolition had long since been decided.
"It's considered that four residential dwellings work perfectly well in that location given that it's in the settlement of Brinscall, which is identified as a rural local service centre," he said.
St. Luke's was originally built as a so-called "chapel of ease" to accompany St. Paul's in nearby Withnell.
The Local Democracy Reporting Service attempted to contact the applicant, Christopher Homer, for comment.