A Papua New Guinea citizen argued that unconstitutional conditions were imposed on him when he was granted a bridging visa after being released from detention.
The conditions included a requirement that the man wear a monitoring device at all times and remain at a designated address between 10pm and 6am each day.
The federal government maintained the measures were necessary to protect the Australian community from the man, who was convicted of murder as a minor and domestic violence offences as an adult.
But the High Court, by majority, found the conditions were invalid, in yet another blow to the federal government's attempts to monitor people released from indefinite immigration detention.
The government introduced the monitoring regime after a landmark 2023 ruling by the same court that indefinite detention was illegal if there was no reasonable prospect of the person's removal from Australia in the foreseeable future.
The decision led to the release of 150 immigration detainees with criminal records, some of whom had convictions for serious offences such as murder and rape.
A number were arrested for allegedly reoffending after their release, sparking fierce public and political backlash.
The government reacted by introducing laws requiring some of the former detainees to wear ankle monitors and abide by a curfew, but those measures were struck down in 2024.
The High Court ruled the conditions were unconstitutional because they represented a punishment imposed by the government not the judiciary.
The regulations were amended to only apply under circumstances in which a person posed a substantial risk of committing a serious offence and the measures were deemed necessary for community safety.
The PNG man who succeeded in the latest High Court challenge had his visa cancelled in 2024 after being jailed for domestic violence offences.
He was subsequently taken into immigration detention before being released into the community on a bridging visa with curfew and monitoring conditions.
The conditions were still incompatible with Australia's constitution, the High Court found on Wednesday.
Home Affairs Minister Tony Burke said people with cancelled visas should leave the country when asked about the decision.
"While obviously the government would have preferred a different outcome, the government's ambition was never about ankle bracelets," he said in a statement.
"Fortunately, we now have the agreement with Nauru, because the best thing for people who have had their visa cancelled is to not be in this country."
Some 43 people who have been on electronic monitoring in the community are expected to be immediately transferred to mandatory reporting conditions, requiring them to check in with authorities at a set time and place.
The cost of the High Court challenge will be paid by the federal government.
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