Lawyer Maria Paolo Costantini who brought the case to the court said she was "delighted" and hailed a victory for campaigners that has been years in the making.
"A conservative estimate is that 4,000 sterile couples went abroad in 2012 for a donor and in Spain 62 per cent of couples seeking the procedure are Italian," she said.
Costantini said that donor-assisted reproduction could restart "immediately" with the re-introduction of rules that existed before the ban was introduced in 2004 and without the need for parliament to approve a new law.
The current health minister, Beatrice Lorenzin, a former Berlusconi ally from the centre-right, said today that the issue was "complex" and the rules could not be reinstated by ministerial decree alone.
"It requires wider approval in parliament," she said.
Costantini argued the ban on donations in Italy was a type of "discrimination" against couples compared to others with fertility problems who are able to use other means of assisted reproduction that are lawful.
The Catholic Church, which is very influential in Italy, is opposed to donor-assisted reproduction but Costantini said Pope Francis appeared to show "a more understanding, less interfering approach".
Costantini said she and the other campaigners who brought the case had argued that the ban should remain in place for homosexual couples, for singles and for women beyond reproductive age.
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