The five-man bench ruled that the detention breached the right to personal liberty in the Constitution. Deputy Chief Justice Sir Gibbs Salika, Justices Sir Bernard Sakora, Ambeng Kandakasi, Don Sawong and Terence Higgins also ordered that both Australia and Papua New Guinea Governments take all necessary steps to stop the operations of the regional processing centre.
Around 900 men are in the detention center on the Papua New Guinean Island, according to Australian immigration authorities.
That detention breaches the right to personal liberty in the constitution of Papua New Guinea (PNG), according to the country's Supreme Court.
The Australian government says the number of children in immigration detention centres dropped steadily between 2013 and 2015. However, numbers have leveled off since February 2015.
Some 1,200 people are currently detained in offshore “regional processing centres” on Manus and Nauru, thousands of miles from Australia, according to immigration authorities.
The camps have been widely condemned and many have called for their closure. A 2015 Australian Senate inquiry reported that the camps had poor hygiene, provided little educational opportunities and also documented several instances of sexual assault.
Some detainees have been in the camps for more than three years. Government figures show the average length of detention as 454 days, as of the end of March.
Current and former child detainees at the Nauru camp described it to CNN as a prison.
“It's not a crime to want to have a better life and future,” said one 18-year-old girl who asked CNN not to reveal her name because she fears for her safety. “We are treated as prisoners.”
In a statement, Australian Minister for Immigration and Border Protection Peter Dutton said the court's decision “does not alter Australia's border protection policies.”
“No one who attempts to travel to Australia illegally by boat will settle in Australia,” he said.
“Those in the Manus Island Regional Processing Centre found to be refugees are able to resettle in Papua New Guinea.
Those found not to be refugees should return to their country of origin. People who have attempted to come illegally by boat and are now in the Manus facility will not be settled in Australia.”
Campaigners against the detention centers greeted the court's decision.
On Twitter, Greens Senator Sarah Hanson-Young said: “It is well time to close these awful detention camps on Manus (and) Nauru and start treating people like human beings. Anything less is senseless.”
Daniel Webb, director of legal advocacy at the Human Rights Law Center, said that the conditions on Manus were “incredibly harmful.”
“We've known it's cruel, we've known it's inhumane, today's judgment confirms it's illegal."
He added that Tuesday's ruling should be a “wake up call” to the Australian government.
“Legally there may be a few ways to respond,” said Aurora Adams, a human rights campaigner at Get Up.
“Morally there is only one option, the camps must be closed."
She described Dutton's statement as “highly disappointing,” adding that there was a clear popular mandate within Australia for the government to change its policy.
Meanwhile, Vanimo -Green MP Belden Namah, the man who took the constitutionality of the Manus asylum centre to court, said he was overwhelmed about the Supreme Court’s decision.
Namah took up the case in his capacity as the Opposition Leader until he was replaced by Don Polye.
“This was the work of God the Almighty and that the fight for justice has not stopped,” he said last night.
“Firstly, I acknowledge and give God the glory for this victory in the asylum seekers case and the 30 months grace period case. God, in His own time, brings all things to pass. “I dedicate these victories to my children, the children of Papua New Guinea and our people. It was for their future that I fought these cases,” Namah said.
“In fighting for what I believe in and the principles I stand for, I persevered for the last three years at great personal cost to myself,” he said. “I am overwhelmed by this latest victory. God bless our beautiful country.
“I want to acknowledge my team who stood by me, firstly Deputy Opposition Leader Sam Basil, Rabul MP Dr Allan Marat, former Nipa-Kutubu MP Philemon Embel and of course my lawyer Loani Henao and QC Marshall Cook. “I would also like to thank the judiciary for finally delivering the decision.”