Chief Justice John Roberts, who was appointed by former President George W. Bush, joined the court's four liberal justices in barring the inclusion of the citizenship question, at least for now, reports Efe news.
The four remaining justices - including two named by President Donald Trump - dissented from the decision on Thursday.
The Constitution mandates that the population of the US be counted every 10 years. The resulting figures are used to determine the number of seats a state has in the US House of Representatives, as well as distribution of roughly $800 billion in federal funds.
In some years, respondents have been asked to say whether or not they were US citizens, but the last time that question appeared on the Census was 1950.
When the Commerce Department, which includes the Census Bureau, announced plans to add the citizenship questions, opponents responded by filing legal challenges.
While the Trump administration said the citizenship question was necessary to ensure compliance with the Voting Rights Act, critics contend the true aim is to intimidate non-citizen immigrants and hold down the count among groups that tend to vote Democratic.
The Census Bureau provides population estimates during the intervals between official counts. In 2017, the US was home to an estimated 325.7 million inhabitants, 14 per cent of them immigrants.
Several federal district courts ordered the Commerce Department to produce a better rationale for adding the question.
The department appealed and the case reached the Supreme Court.
Under the Administrative Procedure Act, the federal government must provide reasonable explanations for its actions, Roberts said.
"If judicial review is to be more than an empty ritual, it must demand something better than the explanation offered for the action taken in this case," the Chief Justice wrote in the majority opinion.
"The evidence tells a story that does not match the explanation (Commerce Secretary Wilbur Ross) gave for his decision," Roberts said. "The sole stated reason - seems to have been contrived. We are presented, in other words, with an explanation for agency action that is incongruent with what the record reveals about the agency's priorities and decision-making process."
The ruling left the door open for the administration to put the question on the Census if it provides an explanation that can withstand judicial scrutiny, though lack of time may foreclose that option.
Controversy about the citizenship question has been fueled by the emergence of evidence that findings from a now-dead Republican expert on redistricting had a major impact on the administration's policy deliberations.
The study by Thomas Hofeller was among some 75,000 documents found on a computer hard drive obtained by the American Civil Liberties Union.
Using "citizen voting age" population as the redistricting population base would be "advantageous to Republicans and Non-Hispanic Whites," Hofeller wrote.
The hard drive was discovered by the expert's daughter, Stephanie Hofeller Lizon, after his death in August 2018.
The Washington Post reported that Lizon also found documents that Hofeller shared his conclusions with Christa Jones, chief of staff to Census Bureau director Steven Dillingham.
Trump administration officials deny having known of Hofeller's work.
( With inputs from IANS )