Western Australia's Chief Justice has ruled that the environmental approvals for the controversial $40 billion Kimberly gas hub were unlawful.
Chief Justice Wayne Martin ruled that three of the Environmental Protection Authority's decisions to grant approval to the project were unlawful and invalid.
And, he said the EPA's chairman Paul Vogel should not have made a decision on the project alone.
Dr Vogel made the sole decision to allow the project to go ahead at James Price Point, north of Broome, after four out of five EPA members declared conflicts of interest.
The Wilderness Society and traditional owner Richard Hunter last year lodged legal action against the EPA and the Environment Minister over the approvals for the gas hub, which would have accommodated Woodside.
Woodside subsequently scrapped its onshore processing plans due to escalating costs, however, the court proceedings continued and the company joined the case.
Last year, the Society's Peter Robertson said once the EPA members had declared their conflict, a separate group of people should have been appointed to assess the project.
"Our views and other people's views, and instead of having a minimum of three EPA board members, they reduced it to just one member of the five member EPA board making the final decision," he said.
"That is just a gross misuse of decision making processes of the EPA."
Mr Robertson says the legal challenge was expensive but the society felt it was its duty.
"[It's about] restoring some confidence and faith in the way that the EPA operates and the way it conducts its environmental assessments," he said.
"If groups like us don't do things like this then they, the Government, will end up getting away with very shonky decision making processes and that can't be allowed to happen."
"When you see an independent statutory body being reduced to nothing more than basically a political facilitation agency for the government, then that's a very, very sad state of affairs for Western Australia, and for our environment and future generations."
The state has been ordered to pay two thirds of the Society's legal costs.
Woodside, with its partner Shell, is believed to be pursuing floating LNG technology for its Browse Basin gas, an offshore processing option.
Meanwhile, the WA State Government is pushing ahead with plans to compulsorily acquire the land at James Price Point.
It plans to secure almost 3,500 hectares of land on the coast north of Broome in case other companies would like to pursue the development.
The decision triggered the release of $30 million in benefits for local Aboriginal families and further benefits could come out of negotiations with a new proponent.