Australia's highest court has upheld a new government law on mandatory packaging for cigarettes that removes brand colours and logos from packaging.
The law requires cigarettes to be sold in olive green packets, with graphic images warning of the consequences of smoking.
The new packaging rules are scheduled to be implemented from 1 December 2012.
"At least a majority of the court is of the opinion that the Act is not contrary to (Australia's constitution)," the court said in a brief statement.
The full judgement is expected to be published on a later date.
The law was passed by the government last year. Authorities have said that plain packaging of cigarettes will help reduce the number of smokers in the country.
Australia's new tough packaging laws are the first of their kind to be implemented in the world.
However, many other countries such as New Zealand, India, the UK and even some states in the US have been contemplating taking similar measures in a bid to reduce the number of smokers.
Jonathan Liberman, director of the McCabe Center for Law and Cancer, said the ruling was likely to give a boost to other countries looking to take similar steps.
"It shows to everybody that the only way to deal with the tobacco industry's claims, sabre rattling and legal threats is to stare them down in court," he said.
The BBC's Sydney correspondent Duncan Kennedy said the decision may have global ramifications for the cigarette makers.
"Whilst Australia might be a relatively small cigarette market, tobacco companies know that losing here could lead to a deluge of legislation elsewhere in their really big markets."