The Quebec Centre for Environmental Law filed a request for an injunction, hoping to halt the project to protect an endangered species of frog called the western chorus frog.
In her ruling, Judge Martine St-Louis denied the injunction, noting that the City of La Prairie did not oppose the project.
"The Court consequently has no jurisdiction to hear it," the ruling said.
Karine Peloffy, director of the Quebec Centre for Environmental Law, said she was surprised by the decision.
"We do not agree with the conclusion the judge comes. We are considering what options they'll take, going forward," said Peloffy.
The Symbiocité project, which would see 1,400 new housing units, is a project where "50 per cent of the development is occupied by a conservation park," according to the company's web site.
Peloffy says she's still concerned the project could wipe out the frog's habitat. She has asked the provincial environment minister to weigh in.
The city of La Prairie would not comment because the case is before the courts, but a spokesperson told CBC that it obtained all necessary permits.
The company building the condos, Quintcap, says work has stopped for the the construction holiday, but said it too has all the necessary permits.
Given Friday's ruling, the construction of the project's second phase can begin as soon as Monday, Aug. 3.