Councillor Steve Evans said the list of planning conditions for the scheme, which has been met with anger from residents, has led to the "huge reduction".
The plans were approved by Wolverhampton Council's planning committee earlier this month.
It came as original proposals for the site, in Whitmore Reans, put the cost at around £1 million.
Extra conditions inserted into the plans mean the site will be run temporarily for 12 months, from first occupation.
The impact and level of use will then be scrutinised, with travellers limited to staying there for 14 days – rather than the original 28.
And these conditions, along with others, had led to the cost being cut, Councillor Steve Evans said in response to Councillor Wendy Thompson – who enquired over the scheme's cost.
Councillor Evans, chief of city environment, said: "We have never planned a travellers site, but we have planned a transit site.
"We have made it very very clear that we would be looking to have a transit site which would support the High Court injunction.
"I assume she was listening at the planning committee and therefore, I have no doubt she would have heard the planning conditions attached to that application to which we would not need to provide electricity, or utilities, or showers or welfare cabins.
"The conditions put in place would mean to remediate the land to provide the transit site would, in all honest, cost £370,000 – a huge reduction on what the costings would have been if we were looking at something else.
"The planning committee – the planning officers they looked at the planning conditions – and the vast majority voted for planning conditions which meant a huge reduction – well done to those people who voted for being sensible, credible and constructive.
"Never-mind about the people who just want to oppose anything and anything."
Councillor Evans said the cost of cleaning up sites after an unauthorised encampment was around £300,000 a year, with the development "costing as much as we were wasting".
A follow-up question from Councillor Thompson over the cost of preparing "other sites" for the development was not answered.