The NSW Planning Minister, Rob Stokes, says the "door's not closed" on a new hotel and apartment tower in Pyrmont, despite an independent panel's decision to reject The Star's $530 million casino plan.

The Independent Planning Commission on Wednesday found the 237-metre tower that became a lightning rod for debate about planning in Pyrmont was "overly obtrusive" and should not proceed.

An artist's impression of The Star's proposed 237-metre tower at Pyrmont. Credit:NSW Planning

Citing concerns the 66-storey building was "inconsistent with current strategic planning for the site and locality and fails to promote the orderly use and development of land", the commission sided with the Department of Planning, Industry and Environment's negative assessment of the plan.

The three-member panel said the proposal would "result in unacceptable built form, including a tower of a height which is overly obtrusive and that will result in unreasonable and unacceptable impacts with respect to view loss, visual impact, and overshadowing".