The Supreme Court voted 5-4 on Friday in favor of letting construction continue.
"Now, the Government has apparently finalized its contracts, avoiding the irreparable harm it claimed in first seeking stay," Justice Stephen Breyer wrote in the court's opinion.
"The Court's decision to let construction continue nevertheless, I fear, may 'operate in effect, as a final judgement.' I would therefore lift the Court's stay of the District Court's injunction."
In January, US media reported that the Trump administration was preparing to divert $7.2 billion in Defence Department funding for border wall construction. The funding was said to be used to construct 885 miles of new fencing by spring 2022.
Following the reported plans on diverting of the funding, in February, US Secretary of Defence Mark Esper authorized the transfer of $3.8 billion to fund border wall construction on the southern border after receiving a new request from the Department of Homeland Security requesting assistance in "blocking drug-smuggling corridors on Federal land".
Later in February, the American Civil Liberties Union (ACLU) filed the lawsuit against the Trump administration on behalf of the Sierra Club and Southern Border Communities Coalition, challenging the government's decision to allocate $3.8 billion in military funds for border wall construction.
The Trump administration has implemented various immigration policies, like the so-called "Remain in Mexico," in an effort to discourage migrants from coming through Mexico to the US border.
