Judge Anthony Kelly ruled the federal government's decision last week to revoke the tennis star's visa to enter the country was "unreasonable" and ordered Djokovic be released.
Djokovic's plight has been closely followed around the world, creating political tensions between Belgrade and Canberra and sparking heated debate over national vaccination mandates.
News of his release was greeted with noisy celebrations of drum beating and dancing by a group of around 50 supporters, many draped in the Serbian flag, outside the Melbourne court.
Kelly also ordered the federal government pay legal costs for Djokovic, who spent several days in an immigration detention hotel, noting that his lawyers argued his "personal and professional reputation and his economic interests may be directly affected."
Lawyers for the federal government, however, indicated the fight may not be over, telling the court Immigration Minister Alex Hawke was reserving the right to exercise his personal power to again revoke Djokovic's visa.
After confirming that such a step, if taken, would bar 34-year-old Djokovic from the country for three years, Kelly warned the government lawyers that "the stakes have now risen, rather than receded."
Hawke's office did not immediately respond to requests for comment.
Djokovic, who was present in his lawyers' chambers for the hearing, did not immediately emerge in public or make a statement after the ruling. The Australian Open starts on Jan. 17. Kelly said he had quashed the government decision to cancel Djokovic's visa because the player was not given enough time to speak to tennis organisers and lawyers to respond fully after he was notified of the intent to cancel his visa.
Kelly noted that officials at Melbourne's airport made the player switch off his phone from midnight to around 7.42 a.m. local time, when the decision to cancel his visa was made.
Officials also reneged on an agreement to give Djokovic until 8.30 a.m. to speak to tournament organiser Tennis Australia and lawyers, the judge said.
Djokovic was instead woken up by officials at around 6.00 a.m. after a brief rest and said he felt pressured to respond. The player, a long-term vocal opponent of mandatory vaccination, told border officials he was unvaccinated and had had COVID-19 twice, according to a transcript of the interview.
MEDICAL EXEMPTION
Kelly earlier told the court it appeared Djokovic had sought and received the required medical exemption from COVID-19 vaccination on the basis that he had contracted the virus last month. He had presented evidence of this before he travelled to Melbourne and when he landed on Wednesday evening.
"What more could this man have done?" Kelly said.
Kelly's ruling did not directly the issue of whether the exemption on the grounds of an infection in the past six months was valid, which the government had disputed.
Tennis Australia CEO Craig Tiley said earlier that his organisation had spoken with federal and state officials for months to ensure the safe passage of players. Tennis Australia did not immediately respond to a request for comment.
It was not immediately clear if the ruling would affect Czech player Renata Voracova who was detained in the same detention hotel as Djokovic after having her visa revoked after issues with her vaccine exemption. Voracova left the country on Friday without challenging her status, the Czech Foreign Ministry said.
POLITICAL BACKLASH
Djokovic's case had caused anger in Australia, where more than 90% of the adult population is double vaccinated and public opinion has been largely against the player.
Emotions run particularly high in Melbourne, which experienced the world's longest cumulative lockdown.
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Uhm..yeah so ok. He's the nr 1 tennis player in the world. He passed COVID, which means awesome immunity AND less risk of spreading the virus, still everyone is hating him suddenly, doesn't add up. As governments are breaking laws and ethics on a daily basis of course it doesn't really surprise us anymore. But truth of the matter is and the most relevant and scary knowledge to bring, anyone you might meet in the street is much more dangerous for their right to vote. People wearing masks alone in their own car excluded of course.
Australia has and has had some of the strictest Covid restrictions and entry requirements of any nation. Many Aussies had problems returning to their nation during lockdown. It is understandable that many are annoyed if not throughly p.. off by vested interests allowing this man to enter that country. I respect his position not to have the vaccine. But his position does not allow him to flaunt national rules. One rule for the famous and one for the rest of us mortals obviously.