Hours later, special counsel Jack Smith's office said it would appeal the order, which could result in it eventually being overturned by a higher court.
The dismissal by US District Judge Aileen Cannon brought an abrupt halt to a criminal case that was regarded as the most perilous of the legal threats confronting the former president.
The Trump-appointed judge ruled prosecutor Jack Smith did not have the authority to bring the case. (AP PHOTO)
The judge's order is a significant victory for Trump as he recovers from a weekend assassination attempt and prepares to accept the Republican nomination in Milwaukee this week.
It's the latest stroke of good fortune in the four criminal cases Trump has faced.
He was convicted in May in his New York hush money trial, but the sentencing has been postponed after a Supreme Court opinion that conferred broad immunity on former presidents.
That opinion will cause major delays in a separate case charging Trump with plotting to overturn his 2020 election loss to Democrat Joe Biden.
Another election subversion case filed in Atlanta has been delayed by revelations of a romantic relationship between the district attorney and a special prosecutor she hired for the case.
In a statement on his social media platform, Trump said the dismissal "should be just the first step' and the three other cases, which he called 'Witch Hunts,' should also be thrown out.
The indictment in the case included dozens of felony counts accusing Trump of illegally hoarding classified records from his presidency at his Mar-a-Lago estate in Palm Beach, Florida, and obstructing FBI efforts to get them back. He had pleaded not guilty and denied wrongdoing.
The classified documents case was considered one of the strongest legal threats facing Donald Trump. (AP PHOTO)
Defence lawyers filed multiple challenges to the case, including asserting that special counsel Jack Smith's appointment by Attorney General Merrick Garland violated the Constitution's Appointments Clause because it did not go through Congress and that Smith's office was improperly funded by the Justice Department.
Cannon agreed, writing on Monday that Garland had exceeded his bounds by appointing a prosecutor without Senate approval and confirmation and had undermined the authority of Congress.
A spokesman for Smith, Peter Carr, said the Justice Department had authorised an appeal.
"The dismissal of the case deviates from the uniform conclusion of all previous courts to have considered the issue that the Attorney General is statutorily authorised to appoint a special counsel," Carr said in a statement.
President Joe Biden said in an interview with NBC News that he wasn't surprised by the decision to dismiss the case, but "the basis upon which the case was thrown out I find specious."
The order is the latest example of the Trump-appointed judge handling the case in ways that have benefited the ex-president.
She generated intense scrutiny during the FBI's investigation when she appointed an independent arbiter to inspect the classified documents recovered during the August 2022 search of Mar-a-Lago, a decision that was overturned months later by a unanimous federal appeals panel.
She has also been slow to issue rulings and has entertained defence motions and arguments that experts said other judges would have dispensed with without hearings. In May, she indefinitely cancelled the trial date amid a series of unresolved legal issues.
Smith's team had vigorously contested the Appointments Clause argument during hearings before Cannon last month, saying Justice Department leadership has full authority to name and fund a special counsel. Attorneys general appointed by both Democratic and Republican presidents have named special counsels without the permission of Congress, going back years.
The Trump team's position got a boost this month in a Supreme Court ruling that said former presidents enjoy expansive immunity from prosecution, with Justice Clarence Thomas writing a separate concurrence questioning whether Smith had been legally appointed.
Trump lawyer Chris Kise praised Cannon for what he said was a 'courageous and correct decision.'
