Alex Attwood spoke ahead of the government decision on a public inquiry into the store's planning application.
"Sprucefield will play a key role as a regional centre which will complement rather than compete with Belfast and existing city and town centres," he said.
A store at Sprucefield would be the first site in Northern Ireland for the retailer, and although the planning application was originally made in 2004, it has been delayed by long-running planning rows.
Traders claim the department store could damage city centre trading, and Alex Attwood said his comments are part of a "precautionary approach to retailing" considering the high vacancy rate.
He added that any plans for new shops must take into account the expansion of Sprucefield for only large items such as furniture and electrical goods.
"I have to do the right thing for all our retailers, all our shop workers, all our communities and the right thing is to allow Sprucefield to grow as a very successful big box retail centre and crucially, at a time of recession, and increasing shop vacancies protect city centres and town centres, most of all Belfast," he added.
I have decided to restrict future retailing at Sprucefield to bulky goods only.
But Minister Attwood said he was not trying to prejudice the outcome of a public inquiry into the Sprucefield planning application, which is due to open in April.
"That planning application remains to be considered carefully following the Planning Appeals Commission Inquiry Report," he explained.
"All the relevant issues within the public inquiry report will be interrogated carefully before a final Ministerial decision is made."
A spokesperson for John Lewis said they were considering the Minister's statement, but remain "fully committed" to opening a full-line department store at Sprucefield.
NI Independent Retail Trade Association Chief Executive Glyn Roberts said they want to see John Lewis in the region
"We have always emphasised the need for them to locate in a town or city centre rather than an out of town location"
"We need closure on the Sprucefield question and hopefully April's Planning Appeals Commission will resolve this issue and not drag it out any further," he added.
Meanwhile, Lisburn city centre is to be put forward for additional retail spaces and Mr Attwood said the centre of Belfast needs to be seen as the leading shopping centre in Northern Ireland.
"I am strongly committed to putting Belfast first in these difficult times. This is consistent with the revised Regional Development Strategy 2035 which aims to strengthen Belfast as the regional economic driver and the primary retail location in Northern Ireland," he said.
Mr Attwood also wants to increase shops in Bangor, Carrickfergus, Ballyclare, Carryduff and Holywood town centres.
"I also want to see Lisburn City Centre and other town centres in the metropolitan area taking additional retail floor space," he said.
His comments are part of the Belfast Metropolitan Area Plan retail strategy, which it is hoped will be adopted by his department by the end of March.
Over the last nine years our consistent and clear position has been that the only suitable location for a John Lewis department store in Northern Ireland is at Sprucefield
Lisburn City Council warned that the move could have major repercussions and may curb future development in towns and cities across NI.
"It is nonsensical that the PAC was tasked, as an independent body, to make impartial recommendations," said Chairman of the Council's Planning Committee, James Tinsley.
"This was duly done and it now appears that the Minister's comments are at odds with these recommendations. We will be seeking urgent clarification on this.
"We are bitterly disappointed with the Minister's announcement and we will continue to support the future retail development at Sprucefield."
Alliance MLA Trevor Lunn said: "The Minister's announcement today is bad news for Lisburn, Greater Belfast and Northern Ireland. Mr Atwood can justify his decision however he chooses but it is a fact, confirmed on many occasions by the developers and the John Lewis consortium that they are not interested in any sites in here except Sprucefield.
"The notion that they can be redirected to Belfast is unrealistic and frankly arrogant."
Sinn Féin MLA Jennifer McCann said: "While I am disappointed at this decision it is not the end of the matter and there is still a possibility that the store could get the go ahead at the site.
"Sinn Féin has lobbied for several years for John Lewis to come to Sprucefield. It would create much-needed employment opportunities to an area like Colin that has a high level of social and economic need. Sinn Féin will continue to push for the development to take place at Sprucefield despite this set back."
Hugh Black, centre manager of Victoria Square in Belfast, said: "Planning policy which bolsters city and town centre environments is exactly what is required for Belfast city centre and the Environment Minister's statement today clarifies a position that makes sense and is in line with good planning practice across the rest of the UK and the developed world."
John King, chief executive of House of Fraser, said: "This decision is in line with planning policy across the rest of the UK which restricts out of town retail in favour of city centre protection and regeneration.
"Alex Attwood has made a responsible and wise decision to strengthen the policy which protects and enhances Belfast's primary shopping role in Northern Ireland."