One of Sydney's only examples of brutalist architecture has been given a second chance, after a court ruled against the government decision not to heritage list it.

The Sirius apartment block in The Rocks was facing demolition following the New South Wales government's rejection of a recommendation to list the building as a valuable piece of architectural heritage. But a judge has today overturned the decision, describing it as an error.

The news has been celebrated by the many campaigners who fought to save Sirius, including Australian comedian and architecture enthusiast Tim Ross.

"The judge mentioned Sirius standing side by side with the Opera House and the Harbour Bridge in terms of iconic Sydney landmarks," he told Dezeen. "This is a triumph for brutalism."

Built in the 1970s, the Sirius building is a housing complex with a stacked-box formation similar to Moshe's Safdie's Habitat 67 complex in Montreal – one of the most famous examples of the controversial architectural style.

Former NSW heritage minister Mark Speakman, now the state's attorney-general, wanted to raze the 79-home complex and use the money to fund up to 240 new social housing units. He estimated that the site could be sold for approximately A$70 million (just under £43 million).

But acting judge Simon Molesworth ruled that Speakman had made two errors in his decision: firstly, that he was wrong to claim a listing would cause financial hardship to Property NSW, which owns the building, and secondly, that he should have considered the block's historical significance.

"The financial impost associated with such iconic heritage items might be enormous, never cease, and cause the owner to suffer financial hardship – but however onerous, any financial hardship would, arguably, never be considered to be undue," said Molesworth, according to The Sydney Morning Herald.

The campaign group Save Our Sirius has spent the last year fighting to protect the housing block. Australian trade unions Unions NSW and the Construction, Forestry, Mining and Energy Union also got behind the drive, by banning their members from working on the site.

Save Our Sirius raised A$50,000 via crowdfunding, and drummed up support from thousands of people. It even prompted a radical new design proposal from Australian studio CplusC Architectural Workshop.

After the ruling, the campaign group – led by Australian Institute of Architects president Shaun Carter – pledged to continue its battle to preserve the structure.

"We're inspired to keep fighting!" it wrote on its Twitter page.