"The state and the Labor Party's youth union are recommended to stop work on the construction of the memorial after the Utøya tragedy, with all the infrastructure and all the facilities that belong to it," reads the ruling.
The Norwegian state and AUF must also pay the plaintiffs' legal costs of more than NOK 1 million.
The memorial on Utøykaia, where the ferry MS Thorbjørn between the island and the mainland docks, would be ready for the tenth anniversary of the terrorist attack on 22 July 2011.
The discussion about the monument has been going on for several years.
Several of the residents in the area have thought that it would be a constant reminder of the trauma, and therefore demanded a so-called temporary injunction.
The 16 people behind the lawsuit have also demanded that construction be stopped completely.
That case will be taken up in court on November 30.