Tiwi Islands traditional owners have won a federal court challenge against Santos' $4.7 billion Barossa gas project in the Timor Sea north of Darwin.

Environmental lawyers representing Munupi clan elder Dennis Tipakalippa argued the group was not properly consulted before approval for the project was granted by the federal regulator in February.

After a five day hearing, including a special on-country session where traditional songs and dances were performed as evidence in the case, federal court justice Mordecai Bromberg ruled that the project's approval was invalid.

The ruling means the gas giant has to maintain a pause on work on the project that began after the court challenge was filed.

The Environment Defenders Office had argued the approval granted by the National Offshore Petroleum and Safety Environmental Management Authority (NOPSEMA) was unlawful.

Lawyers for Mr Tipakalippa said Santos had not consulted with the Munupi clan and gave the Tiwi Land Council (TLC) insufficient information about the project.

Elders including Mr Tipakalippa and sea rangers from the Tiwi Islands told the court of their concerns about the project's possible impacts on cultural and spiritual values as well as food sources and the marine environment.

The court ruled the regulator failed to assess whether the company's approval application showed it had consulted with all relevant parties, as required by law.

It also said NOPSEMA did not consider some material in the application that it was required to assess.

'A huge victory'