Judge Nicholas Garaufis said Tuesday his permanent injunction would be lifted if the city agreed to court-proposed hiring methods.
The judge previously ruled the entrance exams were discriminatory to black and Hispanic applicants and ordered the city to create a new test.
The city has said it wants to hire new firefighters for safety reasons. In his ruling, Garaufis noted the city now is thinking of eliminating existing firefighter jobs. He says those contradictory positions have diverted the parties from developing a new exam.
The city's law department called the judge's statements unfair.