The Federal Court has blocked the approval of a mine in Tasmania's Tarkine region because of fears for the local Tasmanian devil population.
Environmental group Save the Tarkine succeeded in having the federal government's approval of Shree Minerals' iron ore mine at Nelson Bay River overturned.
The group argued former environment minister Tony Burke failed to consider the impact the mine would have upon the Tasmanian devil population.
Justice Shane Marshall on Wednesday declared Mr Burke's approval of the mine was invalid and overturned the decision.
Save the Tarkine spokesman Scott Jordan said the decision vindicated the group's efforts to limit development in the region, in north west Tasmania.
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"This is a great win for the Tarkine, and a great win for the Tasmanian devil," he said.
Tasmanian Deputy Premier Bryan Green said the decision was made because Mr Burke had made an administrative error.
He said the Tasmanian government would lobby the commonwealth for it to be approved as soon as possible.
However, Australian Greens leader Christine Milne said the future of the Tarkine should be in tourism, not in mining.
"When people arrive in Tasmania they don't think of going to the Tarkine first - they go to the World Heritage areas," Senator Milne told reporters.
The state's opposition mining spokesman Adam Brooks said environmentalists had cost Tasmania 120 jobs and $80 million in investment.
"Tasmania is now completely captive to the green agenda," he said.
A spokesman for Environment Minister Mark Butler said the government would consider the decision before deciding its next move.
The Tasmanian devil is under considerable threat from a contagious facial tumour disease which has so far wiped out more than 90 per cent of the species.
In a brief statement to the ASX, Shree Minerals chairman Sanjay Loyalka said the company would carefully review the court's decision before planning its next steps.
