Boris Johnson has turned down plans from developer St Modwen Properties after its proposals were passed by Newham councillors.
The mayor's decision was based on the height, appropriateness and quality of design of the 31-storey tower dominating the scheme. The plans proposed three residential tower blocks containing 350 flats alongside 6,374 square metres of retail space and 164 market stalls.
The development has been opposed by campaigners called the Friends of Queens Market. They said the plans directly threatened the existence of the 110-year-old award-winning market which sells a wide range of affordable, healthy and diverse produce in one of the poorest London boroughs.
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Building work would have meant a split-site temporary market forcing out 40% of the traders.
Campaigner Alice Cook said: "We are so pleased that Boris has stopped St Modwen and the Council’s plans. High-rise blocks are not the solution to improving this area and now we have the possibility of an alternative development and improvement plan, supported by local people, retaining the rent levels and character of the market."