U.S. District Judge Michael Watson ruled that Trump cannot claim a portion of the $450,000 settlement to go toward attorney's fees in a separate case between Daniels, who was born Stephanie Clifford, and himself.
Clifford's former attorney Michael Avenatti also sought to claim a portion of the settlement for outstanding fees for his work representing Clifford in cases against Trump but withdrew his lien.
"Having concluded that neither Avenatti nor Trump currently have an enforceable interest in the settlement funds and that a stay to determine if they will in the future is not warranted, the court hereby directs the Clerk of court to release the funds ... to the plaintiff and her attorneys," Watson wrote.
Clifford, 41, reached a settlement with the city of Columbus, Ohio, in September, in a lawsuit alleging her arrest at the Siren's Gentleman's Club was politically motivated.
Columbus Police Department officers arrested Clifford and two other women on July 11, 2018, for allegedly allowing a patron to touch her. The charges were ultimately dismissed because the law did not apply to Clifford as a guest performer at the club.
Trump sought a portion of the funds to satisfy an order by U.S. District Judge James Otero calling for Clifford to pay $293,052.33 in attorney fees to the president's legal team in a defamation case she filed against Trump that was dismissed in 2018.
In the lawsuit, Clifford alleged an April 18 tweet -- in which Trump said a composite sketch of a man who allegedly threatened her was a "total con job" -- constituted an accusation that she fabricated the sketch and resulted in her being exposed to ridicule and violent threats.
She had also sued Trump and his longtime attorney Michael Cohen over a non-disclosure agreement regarding her alleged 2006 affair with the president.
Avenatti, who represented Clifford in those cases, has been detained after being convicted on charges that he attempted to extort more than $20 million from Nike.