She said there had been "no rational basis" for declining a sit-down interview between Watson, and Mr White, who in 2007 wrote a North and South article that raised "mounting doubts police got the right man".
Justice Dunningham rejected Corrections' argument that the communication ban was to prevent harm to the victims.
"The chief executive does not identify any reason why his decision to control the mode of communication Mr Watson can have with journalists will achieve the objective of minimising harm to the victims, when the harm identified is the inevitable consequence of Mr Watson's views being conveyed to the media through any mode," she said.
"Accordingly, given the value of the right to freedom of expression, and the importance of freedom as to the manner of its exercise, the chief executive has not demonstrated why the limitation he has placed on Mr Watson's exercise of that right is justified."
Watson's father Chris today welcomed the judge's decision.
"Scott will be very happy - it's our first real win in the courts," he told NZME. News Service.
"It's about time we got the tide turned. It would be really great to get a similar positive decision like this with his conviction, which we are still working on trying to overturn."
Corrections deputy chief executive Vincent Arbuckle said the department will be "reconsidering" Mr White's application to interview Watson in prison following today's ruling.
Lawyer Kerry Cook earlier said Watson had gained hope from the cases of David Bain and Teina Pora, Mr Cook said, and he hoped the public would also lend their support to his claims of a miscarriage of justice.
Dr Chris Gallavin , dean of law at Canterbury University, said that while judicial reviews often don't set legal precedents given their narrow and specific focus, he was surprised by Justice Dunningham's "damning" judgement.
"She is basically saying there was no foundation whatsoever for that decision to have been made, which is a difficult conclusion to come by, given the interests of the victims," he said.
After 17 years, Watson - who has always maintained his innocence - has exhausted all avenues of appeal.
Mr White said that to have the last means of professing his innocence, by talking publicly, taken away from him by Corrections must have been "very frustrating".
"After all this time, wouldn't it be good to finally hear from the person who' s at the centre of this very controversial case which does divide people," he said.
"There are many concerns about the evidence, so anything that helps us get closer to the truth perhaps should be encouraged."
New Zealand should also not be "afraid" of examining potential miscarriages of justice, he said.
"If we want to have confidence in our justice system we should make sure the right person is in jail for the right crimes."
