Those who have fought for the last four years to save Sydney's iconic Sirius building are celebrating after a court ruled the Government's decision to keep the building off the heritage list was invalid.

The court has ordered the decision of former NSW heritage minister Mark Speakman have no legal effect and he remake the decision according to law.

The NSW Government wants to sell off the public housing building in the Rocks to raise funds for more social housing.

But the Heritage Council has unanimously recommended the block, built in 1979 in distinct brutalist style, be protected.

Despite this, Mr Speakman decided not to heritage list Sirius.

Mr Speakman's reason for rejecting the recommendation was that "whatever the heritage significance of the building" is, that is outweighed by the "undue financial hardship" its listing would cause.

He said by heritage listing Sirius, the building's sale value of possibly $70 million would be reduced.

However, the court today ruled that Mr Speakman did not properly consider the property's heritage significance.

"It is clear that the Minister side-stepped the required assessment," Acting Justice Simon Molesworth said.

The NSW Government wanted to sell off the building to raise funds for more social housing. ( Supplied: Barton Taylor )

"I am of the opinion that reasoning on the basis of 'whatever the heritage significance' of Sirius, the Minister did not establish a relevant comparator to determine whether the alleged financial hardship caused by listing Sirius would be 'undue'."

'The beginning of things'

The decision is a win for local residents who raised $50,000 through crowd-funding to take the case to court and save Sirius.

Myra Demetriou, 90, who is one of the last two residents of the building, said she was elated to hear the decision.

She said she was pleased to hear the judge make comparisons between the Sirius building and the Sydney Harbour Bridge and the Opera House.

"This is the beginning of things, I don't think it's the end of things," she said.

Last two remaining Sirius residents Myra Demetriou and Cherie Johnson and Save our Sirius chairperson Shaun Carter. ( ABC News: Philippa McDonald )

Save Our Sirius chairperson Shaun Carter said it was a good day for the building, the local community and the whole of NSW.

"Sirius has been temporarily saved," he said.

"This judgment effectively stops the gutting of the Heritage Act which the Minister sought to do."

The view inside 90-year-old resident Myra Demetriou's apartment. ( ABC News: Paige Cockburn )

Mr Carter urged Premier Gladys Berejiklian to "sit down" and talk about the heritage listing of Sirius and how the building could be used for social housing again.

"We are desperately short of social and affordable housing, let's now use it for what it was intended."

Cherie Johnson, the building's only other current resident, urged the Government to put the people above money.

"Have soul, have heart and just consider the community," she said.

Opposition Leader Luke Foley said the decision was a "bloody nose" for the Government and he had one message for Ms Berejiklian: "Abandon this sale now."

"Learn from today's lesson, don't find a new excuse to tear this building down and flog it off," he said.

"Hands off the Sirius."

Minister for Heritage Gabrielle Upton has yet not responded to the decision.

A legal milestone

The decision is the first time a court has had the opportunity to consider the NSW Heritage Act since it was introduced 40 years ago.

Environmental Defenders Office solicitor Elaine Johnson said the judge made clear there are heritage items that may be costly to maintain, but that does not justify leaving them off the register.

"[The judge found] it is neither appropriate nor lawful for a Minister to place greater importance on the loss of funds to the Government from the sale of a building, than on the building's heritage significance," she said.

The Sirius building during its initial construction stage. ( Supplied: Tao Gofers )

The Sirius public housing block of 79 units sits on prime real estate, overlooking Sydney Harbour.

Social-housing activists have long highlighted the apartment block as an important affordable option in inner-Sydney, where the average house price is an eye-watering $1.1 million.

Architect Tao Goffers said he wanted people to realise that the city should not just consist of people who earn millions of dollars and can afford luxury apartments.

Mr Speakman issued a statement to the ABC saying he made his decision in good faith on strong policy grounds.

"Sirius is not the Opera House, it's not the Harbour Bridge, and my view was that whatever contentious heritage value it had was greatly outweighed by being able to fund hundreds more social housing units to cut the 60,000 public housing waiting list," he said.