The Victorian government has reversed its decision to relocate the youths to the maximum security prison - after the the Melbourne Youth Justice Centre was trashed during riots - in the face of a legal challenge.
While lawyers welcomed the decision to remove Indigenous teens from the adult prison, they said Premier Daniel Andrews needed to protect the rights of all Victorian youths.
"The government cannot just pick and choose the children it wants to treat humanely," Human Rights Law Centre advocacy director Ruth Barson said.
"To put young people into a prison that was designed for the most hardened criminals in Victoria is disgusting."
She flagged the potential for future legal action on behalf of the remaining young people if the premier does not show "moral leadership" and ensure all children are safe.
About 15 children remained in Barwon Prison in "appalling, inhumane conditions," she said.
Victorian Aboriginal Legal Service chief executive Wayne Muir said children not protected by the decision remained in real danger.
Many of the youths in detention were on remand and had not been convicted of any crime, he said.
"To put young people into a prison that was designed for the most hardened criminals in Victoria is disgusting," he said.
Families and Children Affairs Minister Jenny Mikakos says the steps taken are consistent with relevant legislation and Victoria's Charter of Human Rights and Responsibilities.
"The settlement made does not preclude aboriginal young people being transferred to the Grevillea Unit at Barwon prison," she said in a statement on Tuesday, referring to a protection unit of the prison.
The youths had already been moved out of the adult prison by the time the settlement was reached on Tuesday.
The premier's office directed requests for comment to Ms Mikakos' office.
Mr Andrews has previously said the young offenders who trashed the Parkville youth detention facility are "going to jail where they belong".
The government move short-circuited the VALS legal action which was to be heard by the Victorian Supreme Court.
Ms Barson said that challenge was expected to test the legality of the government's decision to transfer all children to adult jail.
Instead, the government offered a settlement in the best interest of VALS and HRLC's clients.
"It's out obligations as lawyers to act in the best interest of our client, but it's Premier Andrews' obligation to make sure that all children in detention are safe," Ms Barson said.
"Premier Andrews could today protect all children. We'll absolutely be exploring all options to make sure that children are safe."