The law passed last year by the Republican-controlled Legislature forbids state agencies from providing funds to an organization affiliated with abortion providers. Texas law already required that groups receiving federal or state funding be legally and financially separate from clinics that perform abortions.
Eight Planned Parenthood clinics that do not provide abortions sued over the new law. The clinics say it unconstitutionally restricts their freedom of speech and association to qualify to take part in state health programs.
The judge accepted Planned Parenthood's argument that banning the organization from the program would leave women without access to clinics for basic health services and checkups.
"The court is particularly influenced by the potential for immediate loss of access to necessary medical services by several thousand Texas women," Yeakel wrote in his ruling. "The record before the court at this juncture reflects uncertainty as to the continued viability of the Texas Women's Health Program."
Texas officials have said that if the state is forced to include Planned Parenthood, they will likely shut down the program that provides basic health care and contraception to 130,000 poor women. Yeakel acknowledged that was a risk.
"The court observes that if the federal funds are phased out, Texas does not provide another source of funds, and the Women's Health Program terminates, the controversy now before the court may be of no consequence," he wrote.
The Women's Health Program was established to provide care for poor women who would not otherwise qualify for Medicaid. It supplies cancer screenings, annual exams, and access to birth control.
The court's decision comes after the federal government cut off funding to Texas because of the state regulation excluding affiliates of abortion providers. Federal officials said the rule violates federal law by restricting women from choosing the qualified medical provider of their choice.