Doughty's decision came as part of a lawsuit filed by a coalition of 13 Republican attorneys general claiming the administration had unlawfully issued the order.
The judge said his order applies "nationwide" and will remain in effect pending final resolution of the case, including potential appeals to higher courts. He noted that the decision would effect countless American workers.
"Millions and possibly billions of dollars are at stake," Doughty said. "Local government funding, jobs for Plaintiff State workers, and funds for the restoration of Louisiana's Coastline are at stake. Plaintiff States have a reliance interest in the proceeds derived from offshore and on land oil and gas lease sales."
He added in the ruling that the moratorium should be struck down because it provides no "rational explanation in cancelling the lease sales, and in enacting the pause," and by ordering the pause, the government was "taking actions contrary to law."
In response to the ruling, the Interior Department stated that it is "reviewing the judge's opinion and will comply with the decision."
President Joe Biden had issued the suspension as part of a series of executive orders signed during the first week of his presidency. At the time, the president touted the move as a key way to combat climate change.
The judge's ruling is a major setback for Biden, who was moving quickly to transition the U.S. away from its reliance on fossil fuels believed to emit levels of carbon dioxide harmful to the environment.
Louisiana Republican Attorney General Jeff Landry called the judge's decision "a victory not only for the rule of law, but also for the thousands of workers who produce affordable energy for Americans."
"We appreciate that federal courts have recognized President Biden is completely outside his authority in his attempt to shut down oil and gas leases on federal lands," he added.