Edwin Kemp Attrill and Kaurna Arabana woman Janette Milera brought the legal action against the South Australian government in June.
The pair alleged tree removal works undertaken as part of the North Adelaide golf course redevelopment fell short of federal environmental laws.
Premier Peter Malinauskas previously announced the site would be used to host the LIV Golf tournament in 2028, which has since filed for bankruptcy.
Mr Kemp Attrill and Ms Milera argued the government's plans to remove 585 trees would impact the site's national heritage value.
By the time they commenced their legal action in June, 401 trees had already been removed from the parklands, which encircle Adelaide's city centre and North Adelaide.
On Thursday, however, Federal Court Justice Natalie Charlesworth ruled she was "not satisfied" the project would affect the site's heritage value.
In her judgement, Justice Charlesworth cited evidence that more than 70,000 trees would remain in the parklands.
"It is accepted that the tree removal activity has had some negative impact on the appearance and ambience in the particular places where they once stood," she said.
"However, the listed values are not themselves impacted by that activity."
The applicants failed to prove the redevelopment required prior approval from the federal environment minister and thereby breached federal conservation laws, she said.
"It follows that the proceeding must be dismissed," her judgement reads.
Mr Malinauskas welcomed the decision, claiming it would allow the government to press on with its plans for a "world-class" public golf course.
"This project will deliver better facilities for public golfers, create opportunities to host major international tournaments, support tourism and jobs, and provide improved walking and riding connections for the broader community," he said.
The campaign against the redevelopment project attracted support from conservationists and prominent figures, including former premier Lynn Arnold.
Once completed, it will include an 18-hole course, driving range and practice areas.
Whether it will be used to host the LIV Golf tournament, which filed for bankruptcy in the US in September, remains a subject of debate.
But the men's Australian Open is slated to be held at the course in 2028, after Mr Malinauskas announced in May the state had secured hosting rights.
It would mark the first time Adelaide has hosted the men's event of the prestigious tournament since 1998.
Lawyers for the state government will have until October 22 to inform the court if they wished to pursue costs against the applicants.
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