The high court issued a 4-3 decision, ruling that Wisconsin's Department of Health Services Secretary-designee Andrea Palm exceeded her powers by issuing the order and threatening imprisonment for noncompliance.
"In issuing her order, she arrogated unto herself the power to make the law and the power to execute it, excluding the people from the lawmaking process altogether," the judges ruled.
Republicans in the state legislature brought the case against the order last month, arguing that the measure would hurt businesses and cost residents their jobs.
They requested that the court stay the order for a week to allow them to work out a deal with Gov. Tony Evers to manage the pandemic, but the court ultimately declined to do so.
The ruling immediately lifts all restrictions on businesses and gatherings imposed by the order but keeps in place Evers' order closing schools until the fall.
Evers, who directed Palm and the Health Department to issue the order and to later extend it through May 26, had already begun to lift some restrictions as cases in the state declined.
"Republican legislators convinced four members of the Supreme Court to throw the state into chaos," Evers said Wednesday. "Republicans control that chaos."
Wisconsin Senate Majority Leader Scott Fitzgerald, who brought the suit challenging the order, said it was instead Evers who "set the table for chaos" by straying from his plan's requirements for certain benchmarks when he chose to lift restrictions on retail businesses this week.
"The public started to become skeptical," he said.
The decision comes amid protests and anger in some states against stay-at-home orders put in place to curb COVID-19 infections that have grown to nearly 1.4 million in the country since its first case was recorded mid-January.
Last month, Attorney General William Barr ordered state prosecutors to be on the watch for local coronavirus directives that violate the Constitution and the rights of citizens.