The ritual involves waving a chicken over one's head three times while reciting a prayer for forgiveness then slitting the chicken's throat.
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Each year, the ritual results in thousands of chickens being slaughtered throughout New York City ahead of Yom Kippur.
Animal rights groups have argued the ritual violates more than a dozen New York health and safety and animal cruelty laws which the city chooses not to enforce.
In 2015, the group, Alliance to end Chickens for Kaporos, sued the New York City Police Department hoping a judge would require the department to enforce those laws.
However, a New York Appellate Court ruled that the department could use discretion in enforcing those health, safety and animal cruelty laws as it related to this religious ritual.
Wednesday, the state's Appeals Court released an opinion affirming that ruling, meaning Kaporos will be able to continue without change.
"It's disturbing that the city continues to turn a blind eye to 15 laws being violated," said Nora Constance Marino, the attorney representing the Alliance to end Chickens for Kaporos. "We are disappointed that the court did not exercise their judicial power to right this wrong and we continue to explore other legal remedies."
Members of the ultra-orthodox community said they were delighted by the victory.
"We knew the law was on our side," said Rabbi Shea Hecht, Chairman of the National Committee for the Furtherance of Jewish Education. "Today's opinion is a victory not only for our community but also a victory for New Yorkers and religious freedom as a whole."
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Hecht said he hopes that with the court's decision both sides can agree to disagree and move on peacefully, but added he expects new legal challenges from opponents will follow.
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