Taxi drivers have to make their cars silver and wheelchair-accessible by December 2021 in Cheltenham.
The controversial policy was rubber-stumped last night at a borough council meeting after a series of "challenging" meetings between the authority and drivers, who argued it would be too costly to change vehicles within three years.
The regulations were first reported in March, when dozens of taxis protested by circling the Municipal Offices in the Promenade.
After the four meetings between officers and the local taxi association, the council backed down and agreed drivers won't have to make the change until their vehicle needs to be replaced.
Council leader Steve Jordan said it was a "long and torturous process" in a cabinet meeting last night.
Speaking after the meeting, Hackney Carriage Association chair Gary Knight said: "This doesn't affect just taxi drivers, it affects the whole population of Cheltenham.
"This policy is cataclysmic. It has wiped out £2.6million of the value in our trade just overnight."
In the discussions, cabbies said they would rather change their vehicles to being electric or less polluting rather than wheelchair-accessible.