Justice Geof Muecke was ruling on a request from the group known as the "Nauru 19" who had requested government assistance with their legal costs.
The group is facing trial for alleged offences during an anti-government protest more than three years ago.
Mr Muecke ruled the Nauru government pay $US166,606 dollars to the team of Australian lawyers who have been representing the Nauru group mostly pro bono since 2016.
He has given the government until this Friday to make the payment.
The judge has declared that the Civil Procedures Amendment 2018, passed earlier this month is unconstitutional.
He said the legislation, introduced and passed after he had been asked by the Nauru 19 to make the ruling, aimed to severely limit the opportunities for people facing criminal prosecution to obtain representation and funding.
The Act allowed for maximum legal fees payable per case to $US2,231.
He said the rule of law includes the fact that the community must respect all its individuals as good and law-abiding, unless the contrary is proved, and proved to a high standard.