The commission on Wednesday denied the garden's request to operate at the site in perpetuity.
The City Planning Commissioner Amanda Burden said "the best possible outcome would be a relocated Madison Square Garden."
She said the 15 years will give city, state and federal agencies time to reach agreement on a plan to relocate the arena and allow for the expansion and modernization of Penn Station.
Penn Station sits below the arena.
Madison Square Garden said it was extremely disappointed in the decision, which must still be approved by the City Council.