One cardinal said it was "controversial and perverse" to set up the famed golden arches in a building which is home to seven cardinals and located just metres from St Peter's Square.
And the Committee for the Protection of Borgo, the historic district around the Vatican, told AFP that the outlet would be a further blow to "identity of the area", which draws huge throngs of tourists.
Now, the Borgo Pio branch of McDonald's - nicknamed McVatican - has agreed to collaborate with Medicina Solidale, a local organization which offers assistance to the homeless, in distributing food to those living on the streets around the Vatican.
Lucia Ercoli, director of the organization, said she was "very satisfied with this agreement with McDonald's" and added that the chain has responded "promptly" to their request.
Medicina Solidale has been working with the Vatican's charitable arm over the past year, providing health check-ups and medical care to the local homeless community.
Volunteers and workers at the charity will hand out more than 1000 McDonald's meals to rough sleepers every Monday lunchtime, starting from January 16th. The lunches will include a double cheeseburger, apple slices and a bottle of water.
McDonald's in Italy
Its first restaurant opened up near the Spanish steps in Rome 30 years ago, sparking protests. Fashion brand Valentino, which has its Rome headquarters nearby, complained about the smells and noise from the restaurant, and the opening also sparked the now global Slow Food movement.
Elsewhere, Florence has taken the struggle to protect its culinary history particularly strongly.
In March, the city passed a law aimed at ensuring that at least 70 percent of produce in all new eateries was locally sourced, amid worries that a growing number of cheap kebab shops and other fast food outlets aimed at tourists meant the city was at risk of losing its character.
In 2016, the Tuscan capital turned down a request for the golden arches to set up shop in the city's central square, leading the fast food chain to threaten legal action.
Photo: Frank Kovalchek
Pope Francis and the homeless
The collaboration between the restaurant and the charity is likely to go down well with Pope Francis, who is known for his commitment to the poor and has spoken out against greed in the church.
Pope Francis marked his 78th birthday by ordering the distribution of hundreds of sleeping bags to homeless people in Rome, after spending his 77th birthday with a number of homeless people whom he invited to morning mass at the Vatican. Private tours of the Sistine Chapel have also been offered to local rough sleepers.
The pontiff has also had showers installed in St Peter's Square's public restrooms to give local rough sleepers a place to wash, a decision made after Franco, a homeless man from Sardinia, turned down a dinner invitation from a Vatican archbishop because he “smelled”.
At the weekend, after several homeless people across Italy died in freezing, snowy conditions, Francis appealed for Vatican-run shelters to be kept open 24 hours and for weather-resistant sleeping bags to be distributed to those who did not want to be moved.