The government will now make the final decision.
Plans for the £60m development are for off the A46 near Junction 9 of the M5 and were first put forward in 2013.
A council planners' report said the proposed development would have a harmful impact on nearby town and city centres.
Developer Robert Hitchins said: "There is absolutely no doubt that a factory outlet, attracting thousands of visitors per year and providing a shuttle link to the town centre, would increase footfall in Tewkesbury town centre, not reduce it. Nor are our proposals in direct competition with Gloucester city centre. First, a significant element of the scheme would be a garden centre. Second, an out-of-centre factory outlet is widely accepted as a different form of retail to high street shopping."