There was great debate among Greek historians whether the city of Troy ever existed or it was a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that validated its historical importance along with its literary eminence hitherto

The sentence presents a list of action and all are in the past tense. This doesn't show any sequence of events. Also, the last word hitherto shows since so we need present perfect to show the continuity of effect.

(A) was great debate among Greek historians whether the city of Troy ever existed or it was a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that validated.- Incorrect for reasons stated.

(B) had been great debate among Greek historians whether the city of Troy ever existed or was a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that validated - The debate and the options of what the debate is about should be in the same tense. Validated doesn't show continuity.

C) was great debate among Greek historians whether the city of Troy ever existed or it was a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that had validated - Same as in A.

(D) had been great debate among Greek historians whether the city of Troy had ever existed or had been a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that has validated - Correct

(E) had been great debate among Greek historians whether the city of Troy ever existed or it was a figment of fiction, until the noted archaeologist Schliemann discovered in Turkey a site that many believe to be the ancient city of Troy, a discovery that validates - Incorrect as in B