Australia's High Court has blocked the government's plan to transfer hundreds of asylum seekers to Malaysia.

In a 6-1 majority decision announced Wednesday, the court agreed with a pair of asylum seekers who argued the deal is illegal because Kuala Lumpur has not signed international treaties on the treatment of refugees, and that is not legally bound to guarantee the rights of the asylum seekers.

Immigration Minister Chris Bowen called the High Court's decision “a profoundly disappointing one.” He said the ruling poses “a significant blow” to the government's effort to “break the people-smugglers' business model.”

Prime Minister Julia Gillard's government struck a deal last month to accept 4,000 asylum seekers currently awaiting resettlement in Malaysia, while Malaysia would take 800 undocumented asylum seekers from Australia while their refugee claims are processed.

The court issued a temporary injunction against the government's plan earlier this month.

Wednesday's decision is a major blow to Ms. Gillard's efforts to deter thousands of refugees from war-torn nations such as Afghanistan and Sri Lanka from making the dangerous boat journey to Australia.

Australia's immigration detention centers are crammed with refugees, who are detained indefinitely while their asylum applications are being considered, a process that often takes months.

Violent protests have broken out at the immigration centers in recent months. Hours before Wednesday's ruling, two fires broke out at the Northern Immigration Detention Center in Darwin. News reports say the fires were set by Indonesian Muslim detainees angry at being unable to celebrate the end of the holy month of Ramadan.