"In line with the fact that no consultations were made ... and no adequate notice was given to Nigerians before the withdrawal of existing bank notes ... the directive to stop the circulation of the of the old notes is hereby declared invalid," Justice Emmanuel Agim said, delivering the unanimous verdict.
"Not to do so [have consultations] makes him a dictator," he added.
"No adequate notice was given to Nigerians before the withdrawal of existing bank notes and the reintroduction of the new notes," he said, reading a judgment from a panel of seven judges.
"The directive to stop the circulation of the of the old notes is hereby declared invalid. The old bank notes shall continue to circulate alongside the new ones until 31st of December 2023."
Sixteen states in Nigeria had brought the "old cash" case to the Supreme Court, arguing that most Nigerians were stuck with old notes and needed more time beyond the Feb. 10 date when the bills ceased to be legal tender in a botched move to replace them with newer ones.
Replacement bank notes have been in short supply, which has caused chaotic scenes at banks and adding to Nigerians' already boiling frustrations with high inflation and fuel shortages.
It has also overwhelmed the digital banking network, as a flood of transactions shifted into cyberspace.
In a country where most people rely on cash for everything from taxi fares to buying food from markets, the shortages of naira bills has riled citizens, some of whom have attacked banks and burned cash-dispensing machines.
President Muhammadu Buhari's government has defended the central bank plan to withdraw old 1,000 ($2.17), 500 and 200 naira bills to make way for new notes, saying it would curb money laundering and kidnappings for ransom, and offer greater transparency in financial transactions.
This report was sourced from Reuters and Agence France-Presse.