Shopkeepers have lost their case at the High Court to stop plans for the regeneration of Shepherds Bush Market in west London.
Orion Shepherds Bush Ltd obtained planning permission last year for a plan to widen the market and build flats and a public square.
Twelve claimants, whose shops will be demolished, sought to challenge the decision on planning grounds.
A separate challenge against the plans is continuing.
New premises offered
For the redevelopment, a compulsory purchase order (CPO) has been made for buildings on five acres (two hectares).
A parade of shops in Goldhawk Road, a terrace of market units and two hostels run by the Peabody Trust are among those that will be demolished.
The traders will be offered new retail space and traders new pitches, Hammersmith and Fulham Council has said.
The council has argued that the market, which will be 100 years old next year, has declined over the years and should be attracting shoppers from Westfield shopping centre.
The developers say the £150m scheme will regenerate Shepherds Bush Market and is expected to inject more than £3m a year into the local economy.
At the High Court, the Goldhawk Road shopkeepers argued the planning permission should not have been granted because there were shortcomings in the environmental assessment and in the supplementary planning document.
Following a hearing in July, Mr Justice Keith Lindblom delivered a judgment on Wednesday that said Hammersmith and Fulham had lawfully granted planning permission.
Council leader Nicholas Botterill said: "The offer of new premises remains firmly on the table for businesses wishing to stay in this location and I hope they will now look carefully at the benefits of participating in this scheme."
A separate inquiry is considering the CPO and is expected to return a conclusion soon.