NEW YORK (Reuters) -A federal judge ruled in favor of the company dismantling the Indian Point nuclear power plant in New York on Wednesday, saying a state law designed to limit potential contamination of the Hudson River was preempted by federal law.

U.S. District Judge Kenneth Karas in White Plains, New York said the state law could not stand because it significantly constrained Holtec International's decisionmaking in how to dispose of radioactive materials safely.

Holtec sued to block a 2023 law signed by Governor Kathy Hochul that made it illegal to discharge radioactive materials into the Hudson in connection with the decommissioning, after environmental advocates raised safety concerns.

The company, which has offices in Camden, New Jersey, said its plan to dispose of millions of gallons of tritiated water, a radioactive form of water, complied with Nuclear Regulatory Commission licenses and regulations.

It has also said the New York law could delay Indian Point's planned decommissioning until 2041.

The office of New York Attorney General Letitia James, which defended the state law, did not immediately respond to requests for comment.

Before closing in 2021, Indian Point drew sustained opposition from nuclear power opponents, in part because of its proximity to New York City. The complex is located in Buchanan, New York, about 45 miles (72 km) north of Midtown Manhattan.

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In his 32-page decision, Karas said the law "categorically precludes Holtec from utilizing a federally accepted method of disposal.

"By requiring Holtec to change the method by which it disposes of tritiated water," he added, "the statute directly and substantially affects decisions concerning radiological safety levels."

Karas also rejected New York's argument that Holtec should have offered alternative means to comply with the discharge law.

Holtec said it was pleased with the decision, and believes the federal government and NRC should regulate radiological water discharge.

"We will continue to decommission the Indian Point site in an environmentally responsible manner working with local, state and federal stakeholders," Holtec added.

Earlier this month, Politico reported that Holtec floated possibly restarting Indian Point at an estimated $10 billion cost, provided that the administrations of Hochul and U.S. President Donald Trump back the idea.

The case is Holtec International et al v New York, U.S. District Court, Southern District of New York, No. 24-02929.