A controversial Sacred Heart statue is to remain in its ground-level position outside Killarney Community Hospital, An Bord Pleanála has decided.
The HSE said it took down the statue, which had been in place for around 70 years, for health and safety reasons.
Amid demands that the statue be restored to its elevated position, the HSE was forced to apply to Killarney Town Council for permission to retain it at its ground -level location, near the hospital entrance.
The council refused and the HSE then appealed the case to An Bord Pleanála which has now decided to grant permission.
Independent local councillor Donal Grady, who campaigned for the restoration of the statue to its former position, said: "All the councillors disagreed with taking down the statue, which was a landmark in Killarney. Everyone I spoke to wanted it left where it always had been. People were very angry," he said.
Mr Grady said he was "not a holy Joe" but described himself as a Catholic and a Christian who wanted to see religious symbols retained in hospitals.
"These symbols help people to pray and can bring comfort to the sick. I think people should continue campaigning to have statues and religious objects retained in our hospitals," he added.
He also said the HSE had not produced any evidence to show the statue was a health and safety risk.
An Bord Pleanála inspector Robert Speer said the relocation of the statue to a planted area in the hospital garden did not unduly interfere with the character or use of the building.
A condition of the appeal is that the area surrounding the statue be landscaped and screened.
The appeals board refused the HSE permission for a single-storey entrance lobby to the main entrance of the hospital, saying it would not respect the design of the front facade.