Severn Trent Water wanted to install three tanks in Stennels field, which is a gateway from Manor Lane into the heart of the park, as part of a £300,000 flood alleviation scheme.
The water company said the work was need to stop sewerage flooding during heavy rain, particularly of two homes in Manor Lane, but objectors claimed the flooding issue was not of such significance to warrant the scale of the planned work.
A 143-name petition was drawn up and included the signature of the owner of one of the two affected houses.
Manor Lane resident Jo Gittins said the householder confirmed they had not experienced flooding for more than 10 years.
She said: “The work planned was a large hammer to crack a nut, and we are absolutely thrilled that Severn Trent Water has withdrawn the application.”
Residents had objected to the plans which would have seen hedgerow and tress removed, the creation of a wider access, six manhole covers and hardstanding.
Miss Gittins said residents feared vehicles visiting the site would create a traffic hazard and that the development would have a “significant impact” on the character of the area.
Severn Trent Water have already started laying new larger sewer pipes under Manor Lane as part of the scheme, but programme engineer Ben Gannon said the plans for the tanks had been halted and discussions would be held with residents to find a solution.
He said: “We know that the local people know the area better than we do, as it’s their home, so we’ve stopped our plans and withdrawn the planning application.
“We do still need to do this work to help prevent flooding in the area and to protect our customers, so we’ve arranged a drop in session where the local community can come and talk to us.”
The session will be held on Wednesday September 17 at the Halesowen Golf Club, Leasowes Lane, from 4pm until 8pm.
Mr Gannon added: “We hope that by listening to the community and understanding fully their concerns, we can all work together to come up with a new plan that suits everyone.”