A judge has made a decision on the encampment at 100 Victoria Street in Kitchener.
The Region of Waterloo sought court intervention and filed an injunction application last year to allow police to clear the site at the the corner of Victoria and Weber Street.
But in a decision released Friday, Justice Valente said he will not declare that the homeless individuals are breaching regional by-law and is dismissing the region's request.
Justice Valente said the by-law violates the encampment residents' rights under the Canadian Charter of Rights and Freedoms.
Part of the written decision read, "The By-Law violates section 7 of the Charter in that it deprives the homeless residents of the Encampment of life, liberty and security of the person in a manner not in accordance with the principles of fundamental justice and is not saved by section 1 of the Charter."
One of the reasons cited is there's not enough shelter beds to house all of the homeless individuals living in tents around Waterloo Region, including at the encampment.
Regional Chair Karen Redman released a statement in response to Friday's development. She said the Region of Waterloo will consider next steps and the impacts of the decision.
"Our commitment to supporting those experiencing homelessness continues, as we work to implement innovative and person-centred solutions, including our Interim Housing Solutions and the development of a Plan to End Chronic Homelessness," wrote Redman.
Justice Valente noted the Region of Waterloo can apply to terminate his declaration, "Upon it being in a position to satisfy this Court that the By-Law no longer violates the section 7 rights of the Encampment residents."