Asylum seekers will continue to be processed offshore in Papua New Guinea following a ruling by the High Court.
The court on Wednesday dismissed a legal challenge by an Iranian asylum seeker who is being held in an Australian-run immigration detention centre on Manus Island.
It rejected the argument his detention was not valid under the constitution.
The court ruled that Labor immigration minister Chris Bowen legally designated Manus Island as a processing centre in October 2012.
Opponents of the centre believe asylum seekers are being held in unsafe and inhumane conditions, especially following a deadly riot there in February.
Another Iranian asylum seeker died from injuries after violent clashes with PNG nationals and centre staff.
In 2011, the court ruled against Labor's people swap arrangement with Malaysia.
Prime Minister Tony Abbott said he was pleased the government's policies had passed muster, adding the court had done its job.
"This is a government that is determined to stop the boats," he told reporters in Canberra shortly after the judgment was handed down.
The prime minister noted it had been almost six months since an asylum-seeker boat successfully arrived in Australian waters.
