Fulton County Superior Court Judge Wendy Shoob ruled from the bench against the districts, which argued that the commission is creating an independent school system prohibited by the state constitution. Shoob said state law allows for the creation of "special schools," a definition that fits the charter schools approved by the state commission.
"The General Assembly has provided sufficient guidelines," Shoob said in her ruling issued after she heard more than three hours of arguments from attorneys.
Attorneys for the school districts said they likely will file an appeal.
"She's just wrong," said Mike Bowers, a former state attorney general who is representing Gwinnett County schools in the case.
Gwinnett, the state's largest school district, filed the lawsuit in September, and six other districts have signed on since. The other districts are: Atlanta, DeKalb County, Bulloch County, Candler County, Henry County and Griffin-Spalding County.
The districts were upset that the commission approved charter petitions they had turned down and then moved state funding from the school district to the charter schools' coffers. For districts like Gwinnett, that meant losing $850,000 in a year when state funding for education was slashed by hundreds of millions of dollars.
But charter school supporters say the ruling means the schools will get the funding they deserve and desperately need.
Tony Roberts, CEO of the Georgia Charter Schools Association, celebrated with supporters after the judge's ruling.
"The school districts have proven they dislike the commission, but that does not make it illegal," Roberts said, wiping away tears. "The children in Georgia deserve the best education possible."
Charter schools are funded by taxpayer dollars but are given flexibility to determine how they will meet federal education benchmarks. They are often run by groups of parents, community members, educators or business owners.
The law creating the Charter Schools Commission passed in 2008, part of a series of state laws over the last decade that have made Georgia one of the most open states for the schools.
Shoob's ruling could have help other states looking to start a charter school commission, said Nelson Smith, president of the National Alliance for Public Charter Schools.
"This helps establish more broadly that states have the right to create a statewide body like the commission," Smith said.
Charter school experts say Georgia is one of just seven states - along with Washington, D.C. - with such independent commissions.
Minnesota passed the first charter school law in 1991, and now 39 states and Washington, D.C., allow the schools to be opened. Nationally, there are more than 1.5 million students in nearly 5,000 public charter schools.