Egypt’s Administrative Court on Tuesday reversed the decision to transfer the Red Sea islands of Tiran and Sanafir to Saudi Arabia, according to reports by local media and Reuters.
The state may appeal the ruling at a higher court, and the ruling must also be approved by parliament.
The agreement to transfer the islands, which was announced in April, caused an uproar in Egypt, where it was viewed as a move to "sell" parts of Egypt to Saudi Arabia in exchange for financial support. It was announced during a visit by the Saudi King to Egypt.
Today's ruling is a setback for Egyptian President Abdel Fattah al-Sisi, who had called on Egyptians in a speech to end the controversy over the deal.
The transfer of the islands sparked mass demonstrations, leading to the arrest of more than 200 protesters. Many have since been released, although some received sentences for violating the country's sweeping anti-protest laws.