US District Judge Amy Berman Jackson in Washington had previously ruled Hampton Dellinger, the head of the Office of Special Counsel who is responsible for protecting whistleblowers, could remain in his post pending a ruling.
Berman said in her ruling on Saturday that upholding Trump's ability to fire Dellinger would give him "a constitutional licence to bully officials in the executive branch into doing his will".
The legal battle over the president's authority to oust the head of the independent agency is likely headed back to the US Supreme Court.
Dellinger sued Trump last month after he was fired even though the law says special counsels can be removed by the president "only for inefficiency, neglect of duty, or malfeasance in office".
Jackson, who was nominated to the bench by Democratic president Barack Obama, quickly reinstated Dellinger in the job while he pursued his case.
The ruling comes as Dellinger is challenging the removal of probationary workers who were fired as part of the Trump administration's massive overhaul of the government. A federal board on Tuesday halted the terminations of several probationary workers after Dellinger said their firings may have been unlawful.
The Justice Department says removal protections for the special counsel are unconstitutional and prevent the president from rightfully installing his preferred agency head.
Dellinger's lawyers say the special counsel is meant to be insulated from presidential interference because of the office's unique responsibilities to protect whistleblowers.
with reuters
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