An application for the 800 space car park on East Wall Road was holded withdrawn after a request by Dublin City Council for extra information was not fulfilled.
City planners said it was not possible to determine "if acceptable drainage can be provided for this development" due to the lack of information.
The council's roads section also raised concerns, saying it wanted only one access point from East Wall Road.
Parkrite, which carries out clamping in Dublin city on behalf of the council, had applied for a temporary car park "to facilitate events in coincidence with the O2 Arena".
Senator Paschal Donohoe (FG) and councillors Emer Costello (Lab) and Christy Burke (Ind) objected because the plan would have led to an more traffic in the area.
"I welcome the fact that the application has been withdrawn. It (the car park) would have encouraged people to bring their cars into the area.
"It's a victory for the residents," Cllr Burke said.
A spokesman for the O2 said the concert venue was not mired in the application.
In his letter of objection, Senator Donohoe said locals had "justifiable concerns" about the impact of the increased traffic that the car park would create on the communities of East Wall.
City councillors have already called for a traffic plan to be devised for the O2.
The O2 spokesman told the Herald that public transport would be improved with the opening of the new Docklands Luas line.
He added that parking would be useable for concert goers in the Point Village development when it is completed next year.
The Point Village is being billed as "a world class business and cultural hub" and a "new iconic development".
It is next to the IFSC and the new National Conference Centre and will be joined to Dublin's city centre by the new Luas line.
The O2 is in East Wall Road, near Dublin Port at the site of the old Point Depot.
Car parking is useable nearbyat Conway House, the IFSC, National College of Ireland and Connolly Station car parks.