The US Supreme Court has handed President Donald Trump a victory by ruling his administration could tap into billions of dollars of Pentagon funds to build sections of a controversial border wall with Mexico.

Key points: Activist groups challenged the wall over environmental and humanitarian concerns

Activist groups challenged the wall over environmental and humanitarian concerns Building a wall along the Mexican border was key to Trump's 2016 election campaign

Building a wall along the Mexican border was key to Trump's 2016 election campaign Democrats have called the wall immoral, ineffective and expensive

The court's five conservative justices gave the Trump Administration the greenlight to begin work on four contracts it has awarded using $US2.5 billion ($3.6 billion) of Defence Department money.

Funding for the projects had been frozen by lower courts while a lawsuit over the money proceeded. The court's four liberal justices would not have allowed construction to start.

The justices' decision to lift the freeze on the money allows Mr Trump to make progress on a core aspect of his administration's agenda.

Mr Trump tweeted after the announcement: "Wow! Big VICTORY on the Wall. The United States Supreme Court overturns lower court injunction, allows Southern Border Wall to proceed. Big WIN for Border Security and the Rule of Law!"

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"Today's decision to permit the diversion of military funds for border wall construction will wall off and destroy communities, public lands, and waters in California, New Mexico, and Arizona," said Gloria Smith, an attorney with environmental group the Sierra Club, which sued to block the funds.

In a highly unusual move, Mr Trump on February 15 declared a national emergency in a bid to fund the wall without congressional approval, an action Democrats said exceeded his powers under the US Constitution and usurped the authority of Congress.

The Trump Administration has said it plans to redirect $US6.7 billion ($9.7 billion) from the Departments of Defence and Treasury toward wall construction under the emergency declaration after failing to convince Congress to provide the money, including the $US2.5 billion in Pentagon funding.

Congress earlier failed to provide $US5.7 billion ($8.25 billion) in wall funding demanded by Mr Trump in a showdown in which the President triggered a 35-day partial shutdown of the Federal Government that ended in January.

The Trump Administration said a court decision was needed quickly because it needs to spend the money before the end of September, when the Federal Government's fiscal year ends.

Hardline immigration policies are a key part of Trump's 2020 re-election campaign. ( AP: Carloyn Kaster )

"We are pleased that the Supreme Court recognised that the lower courts should not have halted construction of walls on the southern border," Alexei Woltornist, a spokesman for the Justice Department, said in a statement.

"We will continue to vigorously defend the administration's efforts to protect our nation."

Mr Trump made the border wall a major 2016 campaign pledge, as part of his promise to 'Make America Great Again'.

The wall is part of his hard line immigration policies that are central to his 2020 re-election bid.

Mr Trump has said the wall is needed to curb illegal immigration and drug trafficking across the southern border.

Democrats have called the wall immoral, ineffective and expensive.

The Southern Border Communities Coalition, a group advocating for people living in border areas, joined the Sierra Club in suing to try to block Trump's action.

The challengers have said the wall would be disruptive to the environment in part because it could worsen flooding problems and have a negative impact on wildlife.

Dror Ladin, a lawyer for the American Civil Liberties Union (ACLU) who brought the case to the Supreme Court on behalf of the Sierra Club and Southern Border Communities Coalition, said after the court's announcement that the fight "is not over."

The case will continue, but the Supreme Court's decision suggests an ultimate victory for the ACLU is unlikely.

Civil rights groups have raised objections to the wall on environmental and humanitarian grounds. ( AP: Jacquelyn Martin )

Even if the ACLU were to win, fencing will have already been built.

House Speaker Nancy Pelosi issued a statement on Saturday (AEST) accusing Mr Trump of trying to "undermine our military readiness and steal from our men and women in uniform to waste billions on a wasteful, ineffective wall that Congress on a bipartisan basis has repeatedly refused to fund."

She said the Supreme Court's decision "undermines the Constitution and the law."

Senate Democratic Leader Chuck Schumer of New York called the decision "deeply regrettable and nonsensical."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 44 seconds 44 s Trump says border wall 'looks fantastic'

AP/Reuters