US President Donald Trump says his administration would go "all the way up to the Supreme Court" to fight the ruling.
Just hours before President Donald Trump's revised travel ban was set to go into effect, a US federal judge in Hawaii on Wednesday issued an emergency halt to the order's implementation.
The action was the latest legal blow to the administration's efforts to temporarily ban refugees as well as travellers from six predominantly Muslim countries.
The new ban, signed by the president on March 6, had aimed to overcome legal problems with a January executive order that caused chaos at airports and sparked mass protests before a Washington judge stopped its enforcement in February.
US District Judge Derrick Watson put an emergency stop to the new order in response to a lawsuit filed by the state of Hawaii, which argued that the order discriminated against Muslims in violation of the US Constitution. President Trump has said the policy is critical for national security and does not discriminate against any religion.
Trump vows to challenge decision at Supreme Court
Judge Watson concluded in his ruling that while the order did not mention Islam by name, "a reasonable, objective observer ... would conclude that the Executive Order was issued with a purpose to disfavour a particular religion." Watson was appointed to the bench by former Democratic President Barack Obama.
Trump said the judge's legal block "makes us look weak" and represented "unprecedented judicial overreach," speaking at a rally in Nashville, Tennessee. He said he'll take case "as far as it needs to go" including to the Supreme Court.
Paul Ryan, the Republican Speaker of the US House of Representatives, said the ban was needed to improve vetting of people entering the United States and he had no doubt that it would be upheld by higher courts.
The legal battle is likely to move now to the federal appeals circuit and could eventually get to the US Supreme Court.
The case was one of several moving through US courts on Wednesday that were brought by states' attorneys general and immigrant advocacy groups.
TRT World's Lorna Shaddick has more details from New York.