A California court has ordered a Silicon Valley billionaire to restore access to a beloved beach that he closed off for his private use, a major victory for public lands advocates who have been fighting the venture capitalist for years.

An appeals court ruled on Thursday that Vinod Khosla, who runs the venture capital firm Khosla Ventures and co-founded the tech company Sun Microsystems, must unlock the gates to Martins Beach in northern California by his property.

The decision is a major blow to Khosla and other wealthy landowners who have increasingly tried to buy up the internationally celebrated beaches along the California coast and turn public lands into private property.

The beach was a popular destination for fishing, surfing and other recreational activities for nearly a century, and the previous owners provided a general store and public restroom. But Khosla eventually bought the property and in 2010 closed public access, putting up signs warning against trespassing.

Khosla, who has a net worth of $1.55bn and does not live on the property, has faced multiple lawsuits and legislative efforts to get him to open up the gate to the beach near Half Moon Bay, about 30 miles south of San Francisco. The law in California states that all beaches should be open to the public up to the “mean high tide line”.

The decision this week, affirming a lower court ruling, stems from a lawsuit filed by the Surfrider Foundation, a not-for-profit group that says the case could have broader implications for beach access across the US.

“Vinod Khosla, with his billions of dollars, bought this piece of property and said, ‘No, no, the public isn’t going to use this anymore. End of story,’” the Surfrider attorney Joe Cotchett said by phone on Thursday. “He got away with it for many years … This is probably one of the most important public right-of-access cases in the country.”

Khosla’s refusal to restore access has made him something of a symbol of the immense wealth in the tech industry and rising income inequality in the region.

Last year, his attorneys claimed that he would open the gate to the beach only if the government paid him $30m, an amount that state officials said was unreasonably high. In October, Khosla also sued two state agencies, accusing the government of using “coercion and harassment” to infringe on his private property rights.

The California coastal commission, established by voters in 1972 to protect public use of the coast, has reported that beachgoers have increasingly complained about private security guards telling them they are trespassing on private property and forcing them to leave the public beaches.

“The issue here is, can wealthy private individuals buy up our beautiful beaches for their own use?” said Cotchett, adding that he expects Khosla to appeal the decision and attempt to bring the case to the US supreme court.

Khosla’s attorney did not immediately respond to a request for comment.

Khosla recently made headlines when he downplayed the problem of sexual harassment in the venture capital industry, which has recently been exposed as a major concern among female founders. “I did not know that there was any discrimination,” Khosla said at a recent event, adding that it was “rarer than in most other businesses”.