The original listing in 2001 was based not on sound legal judgements but on conclusions derived from the media and the Internet, the General Court of the European Union said in a statement.
But it stressed that today's decision to remove Hamas was based on technical grounds and does "not imply any substantive assessment of the question of the classification of Hamas as a terrorist group."
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Hamas, which has been in power in the Palestinian territory of Gaza since 2007, had appealed against its inclusion on the blacklist on several grounds.
The judgement comes hours before the European Parliament is expected to vote on the recognition of a Palestinian state, after several EU countries enraged Israel by taking a similar step.
Hamas's military wing was added to the European Union's first-ever terrorism blacklist drawn up in December 2001 in the wake of the September 11 attacks on the United States.
The EU blacklisted the political wing of Hamas in 2003.
"The General Court finds that the contested measures are based not on acts examined and confirmed in decisions of competent authorities but on factual imputations derived from the press and the Internet," the court said.
Instead, such an action had to be based on facts previously established by competent authorities.
Sri Lanka's Tamil Tigers were removed from the list in October after an almost identical judgement.
The lawyer for Hamas, Liliane Glock, told AFP she was "satisfied with the decision".
"Every decision since 2001 imposing restrictive measures, including on the armed wing, have been annulled. I believe that this judgement shows the whole world that it exists and is legal," Glock said.
The lawyer added that the court's decision also showed that the EU could not base its decision on the US terror list, although there was no mention of that list in the court's judgement.
There was no immediate reaction from the Israeli government nor from the EU.
Hamas was founded in 1987 shortly after the start of the first Palestinian intifada, or uprising, and was inspired by Egypt's Muslim Brotherhood.
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