US District Judge Michael Farbiarz in Newark, New Jersey, said his ruling would not take effect until Friday to give the administration the chance to appeal.
Farbiarz wrote that the administration was violating Khalil's right to free speech by detaining and trying to deport him under a little-used provision of US immigration law granting the US secretary of state the power to seek the deportation of any non-citizen whose presence in the country is deemed adverse to US foreign policy interests.
"The Petitioner's career and reputation are being damaged and his speech is being chilled," Farbiarz wrote.
"This adds up to irreparable harm."
The judge also barred the administration from deporting Khalil on the grounds that his presence was allegedly adverse to US foreign policy.
"This is the news we've been waiting over three months for," Khalil's wife, Dr Noor Abdalla, said on Wednesday.
"Mahmoud must be released immediately and safely returned home to New York to be with me and our newborn baby, Deen."
Neither the State Department nor the Justice Department, which represents the administration in court, immediately responded to requests for comment.
Khalil was arrested on March 8 after the State Department revoked his green card.
He has since been held in immigration detention in Louisiana.
Khalil was the first known foreign student to be arrested as part of Republican President Donald Trump's bid to deport foreign students who took part in pro-Palestinian protests that swept US college campuses after Hamas's October 7, 2023, attack on Israel and Israel's subsequent military assault.
The Hamas attack killed 1195 people, according to Israeli tallies, and Israel's military campaign has killed more than 54,000 Palestinians, according to the Gaza health ministry.
