It was a deeply unpopular law and the court ruling that it is unconstitutional has delighted some, angered others, and left Israel's Prime Minister Benjamin Netanyahu with a potential coalition crisis, DPA reported.
The Service Deferral Law had exempted ultra-Orthodox from compulsory military service. It was introduced with good intentions a decade ago.
But on Tuesday, it was struck down by a Supreme Court vote of 6-3. and the law will now be left to expire in August.
Lawmakers had hoped to encourage draft-age ultra-Orthodox men to undertake military service by giving them a year to choose between full-time study or enlisting in the army before entering the workforce.
A higher number of people from the community who entered the workforce via the army would mean a lower number of people dependent on welfare.
In reality, however, the ultra-Orthodox did not flood enlistment centres.
And the issue remained a perennial hot potato in Israeli society, where the secular community felt they were carrying an unequal share of the national burden.
In the words of Defence Minister Ehud Barak, "the law did not meet the expectations".
Outgoing Supreme Court Justice Dorit Beinish was more succinct - the law had simply "failed," she said in the ruling.
Facts and figures bear out this reasoning.
When the country's first prime minister, David Ben-Gurion, agreed to allow the ultra-Orthodox evade military service in favour of studying Jewish law, the number receiving such an exemption stood at only 400.
In 2010, it stood at 62,500.
According to one set of data, 1,282 out of 8,500 eligible ultra-Orthodox men had enlisted in the military last year.
Ultra-Orthodox leaders greeted the Supreme Court ruling with dismay and some anger.
Legislator Israel Eichler told Israel Radio he disputed the authority of the court to decide on what was or was not constitutional.
Interior Minister Eli Yishai, leader of the ultra-Orthodox Shas Party, said he would meet with Netanyahu to discuss the matter.
Opponents of the Service Deferral Law, on the other hand, could not hide their glee.
"An historic decision," said Medad Luzon, of the Movement for Quality Government in Israel. She told dpa that she hoped parliament would now "really invest effort and thought" into a more balanced law.
Foreign Minister Avigdor Lieberman, leader of the secular, nationalist Yisrael B'Teinu party, also welcomed the ruling. The secular, nationalist party he heads, Yisrael B'Teinu, would propose an alternative legislation.
And that presents Netanyahu with a potential problem, which, if no compromise solution is found, could spell the end of his coalition.
The Supreme Court ruling may have allowed Netanyahu to placate Lieberman, whose party is his largest coalition partner, and who has long opposed draft deferments for the ultra-Orthodox.
But it also sets up a collision course with ultra-Orthodox parties, without whose support Netanyahu's government cannot survive.
The Yediot Ahronoth newspaper quoted unnamed senior members of Netanyahu's Likud party as saying that the court ruling may have relieved the premier of a short-term problem, given the way his secular and ultra-Orthodox partners disagreed over the future law.
This however does not make the problem go away. The ultra-Orthodox are unlikely to support any new law on blanket mandatory military service which is championed by the secular side.
And because of their court victory the secular camp, acutely aware of how unpopular the issue of draft deferments is, will not accept any situation which means in effect a return to the status which previously existed.
Writing in daily Wednesday, analyst Sima Kadmon said simply that the court annulled a law that was due to end in August.
"Or in other words," she wrote, the Supreme Court decided that we shall go to elections this year."