Legal action launched by Munupi senior Lawman Dennis Tipakalippa has ended with the Federal Court invalidating Santos' approval to drill for gas in the sea north of the Tiwi Islands.
The court found Santos failed to consult Tiwi Traditional Owners as required, and the company must now vacate the Barossa field by October 6.
Santos has already indicated it will appeal the decision, stating offshore oil and gas regulator NOPSEMA had accepted proper consultation had taken place.
Mr Tipakalippa launched the legal action in June, arguing NOPSEMA should not have approved Santos' plans to drill the Barossa gas field because the gas giant failed to properly consult the Munupi Clan.
Traditional Owners told the court Santos' Barossa offshore gas project posed a risk to food sources and spiritual connection to sea Country.
Mr Tipakalippa said he was "the happiest man alive" after the court's ruling.
"We want Santos and all mining companies to remember - we are powerful, we will fight for our land and Sea Country, for our future generations no matter how hard and how long," he said.
"Today we have had our voices heard. We cannot be sidelined or silenced."
Santos chief executive Kevin Gallagher said in a statement the case warranted a review.
"Given the significance of this decision to us, our international joint venture partners and customers, and the industry more broadly, we consider that it should be reviewed by the Full Federal Court on appeal," they said.
"As a result of the decision, the drilling activities will be suspended pending a favourable appeal outcome or the approval of a fresh environment plan.
"Consistent with previous practice, Santos engaged about the proposed drilling activities with the Tiwi Land Council, a representative body with statutory authority under the Aboriginal Land Rights (Northern Territory) Act 1976."
Santos said it would seek to expedite this process.
Environmental Defenders Office special counsel Alina Leikin said the result would set a new standard for consultation.
"It confirms that the voices of First Nations communities must be heard when their Countries and cultures are under threat," she said.
The Federal Court journeyed to to the Pitjamirra beach homeland on Melville Island of the Tiwi Islands in August to take on-Country evidence from Traditional Owners.