The Melbourne City Council (MCC) has been ordered to publish an apology for discriminating against the meditation group Falun Dafa by barring it from the city's 2003 Moomba Parade.
The Falun Dafa Association of Victoria had been given a spot in the parade and had finished preparations when the council changed its mind and told them they could not participate.
Judge John Bowman of the Victorian Civil and Administrative Tribunal (VCAT) ruled the council had discriminated against Falun Dafa.
He ordered the MCC publish an apology within 14 days in three Chinese newspapers - the Chinese Melbourne Daily, SingTao Daily and The Australian Chinese Daily - and pay the Falun Dafa's court costs.
Judge Bowman said Falun Dafa was entitled to an apology as its reputation had been damaged by the incident.
Falun Dafa had also "expended considerable time energy and thus suffered considerable inconvenience, preparing for and pursuing an enterprise from which it was wrongfully excluded," he said.
In the apology, agreed on by the two parties, the MCC said it regretted any inconvenience or damage to Falun Dafa's reputation.
"The Council now acknowledges that the exclusion was in contravention of the Equal Opportunity Act 1995 and it apologises for this to the Falun Dafa Association," part of the apology reads.
Falun Dafa Association spokeswoman Ana Caterina Vereshaka said members of the association had completed their preparations for the parade when they were told they could no longer take part.
"We were in shock - I was at work and I just thought `it's not possible'," she said.
Ms Vereshaka said association members had spent hundreds of hours and thousands of dollars on their preparations.
"Elderly ladies had put their pension money into buying materials," she said.
The council had cited the group's political associations when refusing them but had not made clear what these associations were, she said.
The MCC today would not discuss the reasons for ejecting the association from the parade.
Deputy Lord Mayor Susan Riley today said the council had considered Judge Bowman's decision and was bound by it.
Falun Dafa, which promotes meditation and exercise, has been banned in China since 1999.
They claim more than 500 practitioners have been killed for their beliefs.