The application came before the Committee at their August meeting on Tuesday and members followed the recommendation by planning officers to refuse.
The grounds given for this decision was the fact that it contravened policy C1 of the Scottish Borders Structure Plan 2001-2011 in that the suggested change of use would have a significant adverse impact on the level of provision of facilities and services in Birgham and the surrounding area to the detriment of the local community and tourism.
Following news of the proposals earlier this year, residents set up a 'Save Our Birgham Pub' campaign which had its own dedicated website as well as a page on Myspace which carried the 'Berwickshire News' front page story on the matter from May 8.
The Treaty, which is believed to be 200 years old, was once a thriving public house in the village but was closed as a licensed premises in September last year. It was formerly known as The Fisherman's Arms.
At the time, the owners Mr and Mrs Vince said that the business simply wasn't viable anymore. A meeting held at the end of last year to gauge public opinion on the closure led to crowds of people packing out Birgham Village Hall to the rafters for the biggest meeting it had ever witnessed.
And the strength of feeling in the village was picked up on by Mid-Berwickshire Councillor Donald Moffat who praised the efforts of the campaign at Tuesday's committee meeting.
He said: "The local community have strong views on this matter and they have worked hard to make these known. With this in mind I think the recommendation of the planning officers is the right one to make."
As one of the statutory consultees for the application, Leitholm, Birgham and Eccles Community Council had the opportunity to make an official response to the plans and spoke about "the great excitement and expectation" which accompanied the re-opening of the pub as The Treaty a few years ago.
However, they also admitted that this local support dwindled when a decision was made to market The Treaty as a restaurant rather than a village pub and opening hours were restricted.
Speaking to 'The Berwickshire News' earlier this year, campaigner Alistair Cunningham said that he thought publicans would be interested in re-opening The Treaty as a village pub if the valuation was realistic.
Birgham has doubled in size in recent years and if The Treaty remains closed the nearest pub for locals will be in Coldstream some six miles away.
And as well as locals wanting a place to socialise and enjoy a drink, the 'Save Our Birgham Pub' campaign also highlighted the need of tourists from nearby bed and breakfasts to have somewhere to go for refreshment.