US District Judge J. Campbell Barker had previously put an administrative hold on the regulation, rolled out earlier this year when President Joe Biden was running for reelection, as the judge considered the lawsuit brought by Texas and 15 other states. The policy shielded select undocumented spouses of US citizens from deportation and allowed them to work legally in the country as they sought citizenship.
In his Thursday ruling on the merits of their case, Barker, appointed by President-elect Donald Trump during his first term, said that Congress had not given the executive branch the authority to implement such a policy. He wrote that "history and purpose confirm that defendants' view" of the relevant immigration law "stretches legal interpretation past its breaking point."
The case is one of several ongoing legal challenges to Biden administration policies that the incoming Trump administration may refuse to defend after the White House changes hands.
Barker rejected a request by individuals who benefited from the program to intervene in the case so that they could also defend the policy.
The policy would have applied to people who have been living in the United States for 10 years, and utilized existing legal authority known as "parole in place" that offers deportation protections. In addition to spouses, the policy would also apply to undocumented stepchildren of US citizens.
As CNN previously reported, it was estimated that the program could directly affect 750,000 to 800,000 people. That could have made it the federal government's most sweeping relief program since the 2012 implementation of the Deferred Action for Childhood Arrivals program, or DACA, which shields undocumented immigrants brought to the United States as minors from deportation.
DACA itself is currently the target of a yearslong legal challenge. An appeals court earlier this fall heard arguments on a judge's ruling that deemed the DACA program unlawful but allowed it to continue for current enrollees while an appeal played out.
This story has been updated with additional details.
CNN's Kevin Liptak, Lauren Fox, Edward-Isaac Dovere and Priscilla Alvarez contributed to this report.