The California Coastal Commission made the decision Wednesday involving the proposal by Pebble Beach Co. to build 90 homes in Monterey County's Del Monte Forest.
The proposal also called for preserving 635 acres of native forest and improving public access to the breathtaking site.
The project is vastly smaller than one Eastwood and his partners Arnold Palmer and former baseball commissioner Peter Ueberroth initially put forward.
That plan included an 18-hole golf course, revamped polo fields and 100 new mansions near the famed Pebble Beach Golf Links.
The commission voted that down in 2007, leading to the much smaller plan.