The United States District Court has modified the permit issued for the construction of Pier 55, making it near impossible for the project to go ahead.
The City Club of New York advocacy group opposed the pier, which is backed by fashion designer Diane von Furstenberg and husband Barry Diller.
The $200 million plans by British designer Thomas Heatherwick comprises an undulating landscape over the water, supported by mushroom-shaped columns. It would be accessed via two decked walkways, connected to the esplanade along the Chelsea shoreline close to 13th Street.
On 23 March 2017, the court ruled that the structure would obstruct views across the river and affect marine life.
The non-profit Hudson River Park Trust organisation – in charge of managing the park – argued that the venue would provide a much-needed recreation and cultural space, but the judge decided that these activities could easily take place elsewhere.
"We're very happy," City Club president Michael Gruen told The Architect's Newspaper. "It looks like this ruling may be very beneficial for the public in terms of finally being done with a project that would obscure the view of the water and could very well go somewhere else."
First revealed in November 2014, the 10,000-square-metre park was designed to replace the dilapidated Pier 54.
However, the project has been dogged with controversy and subject of an ongoing legal battle since its inception.
Construction was due to begin this summer, after the pier received approval from the US Army Corps of Engineers and the court case was deemed settled.
It is possible for the Hudson River Park Trust to re-apply for a permit with the Army Corp, but the ruling makes its approval unlikely.
"We have won four challenges in four courts on this project," said a statement from the trust. "Not one of those decisions determined the proposed project would harm the environment – and neither does this one."
"But even if largely procedural, we are deeply disappointed by this ruling, and are reviewing it carefully to determine our next steps," it added.
Thomas Heatherwick ranked at number 23 in the inaugural Dezeen Hot List, a countdown of the year's biggest names in architecture and design, according to Dezeen readers.
He is currently working on another controversial park project – his Garden Bridge for London's River Thames has faced a similarly bumpy journey towards construction.