The High Court said Wednesday that the environment ministry's 2023 go-ahead for the exploratory operations in the roughly 10,000-square-kilometre (3,860-square-mile) block near Cape Town had been "reviewed and set aside".
Environmental lobby groups had launched a legal challenge against the project, saying it would harm marine life.
The block is jointly owned by South Africa's state oil company PetroSA, TotalEnergies and British oil heavyweight Shell, with the French firm serving as the operator.
In overturning the environmental permit, the judge Nobahle Mangcu-Lockwood said TotalEnergies could reapply for authorisation after public consultation.
Green Connection, one of groups that filed the legal challenge, said the ruling was a major victory for coastal communities and small-scale fishers.
"Oil spill and blowout contingency plans were kept from the public until after approval, denying communities a chance to comment," its legal advisor, Shahil Singh, said in a statement.
Interest in oil and gas exploration off South Africa's coast has surged in recent years, driven in part by major discoveries across the maritime border in Namibia and broader energy activity in southern Africa, including Mozambique.
The Natural Justice group of environmental lawyers said Wednesday's judgement affirmed that all companies needed to follow due process before seeking the green light for oil exploration off South Africa.
"We will continue to turn to our courts to not only stop the takers who parade under the guise of growth and development, but to ensure that impacts of oil and gas exploration and production are properly scrutinised and that our people and our resources are not exploited," it said.
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