The judge turned his earlier temporary restraining order into a preliminary injunction that would have a more lasting effect.
President Trump’s executive order on March 6 would have placed a 90-day ban on people from Iran, Libya, Somalia, Sudan and Yemen and a 120-day ban on refugees.
An earlier version of the order, issued in January, sparked confusion and protests, and was blocked by a judge in Seattle.
Other courts across the US have issued different rulings on President Trump’s revised ban, with a judge in Maryland halting a part of the ban earlier this month.
Donald Trump has complained of “unprecedented judicial overreach”, pledging to take the case “as far as it needs to go”.
An appeal against the Hawaii decision would be expected to go next to the Ninth Circuit Court of Appeals – the same court which in February said it would not block a ruling by a Seattle court to halt the original travel ban.
Under the revised order, citizens of six countries on the original January 27 order – Iran, Libya, Syria, Somalia, Sudan and Yemen – would once more be subject to a 90-day travel ban.
Judge Derrick Watson said the court had established a strong likelihood that, were the ban to go ahead, it would cause “irreparable injury” by violating First Amendment protections against religious discrimination.
Hawaii had argued that the ban would harm tourism and the ability to recruit foreign students and workers in the state.
The 43-page ruling argued that a “reasonable, objective observer” taking into account the context of the Executive Order would conclude it “was issued with a purpose to disfavor a particular religion”.
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It notes statements made by Donald Trump such as a 2015 press release calling for “a total and complete shutdown of Muslims entering the United States”, and his adviser Rudolph Guiliani, who said in a TV interview in January: “When [President Trump] first announced it, he said, <<Muslim ban>>. He called me up. He said: <<Put a commission together. Show me the right way to do it legally>>.”
It also says there is a “dearth of evidence indicating a national security purpose”.
Speaking at a rally in Nashville, Tennessee on March 15, Donald Trump said the ruling in Hawaii was “flawed” and a case of “unprecedented judicial overreach”.
The Trump administration argues that the constitution gives the president the power to suspend immigration when he deems it to be in the national interest of the country, and that neither the initial or revised orders discriminate on the basis of religion.
DoJ lawyers argue that the revised ban is an extension of President Barack Obama’s move towards stricter screening of travelers from the six countries.
Donald Trump said he will take the case “as far as it needs to go”, including to the Supreme Court.
An appeal against the Hawaii decision would be expected to go next to the Ninth Circuit Court of Appeals – the same court which in February said it would not block a ruling by a Seattle court to half the original travel ban.
However, also on March 15, five judges at that court wrote a letter saying they believed that decision was an “error”, and the first Executive Order was “well within the powers of the presidency”.
California, Maryland, Massachusetts, New York, Oregon and Washington are all taking part in legal actions against the revised ban.
Washington state Attorney General Bob Ferguson, who is attending a court hearing in Seattle in his efforts to block the travel ban, described the ruling as “fantastic news”.
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