A Sri Lankan family determined to stay in Australia after living here for almost a decade have won a court battle in their ongoing fight to return to their Queensland town.

The Murugappan family, who previously lived in the community of Biloela, have been waiting in detention to learn the outcome of a Federal Court fight to avoid deportation.

On Tuesday morning the court ruled their fight was successful, and the family can stay in Australia.

If they had lost, there would be little preventing the government deporting the family to Sri Lanka, where they claim they are in danger through being a member of a persecuted ethnic minority, the Tamils.

But the legal battle has a long way to go yet.

The family remains in detention, as only the Minister for Home Affairs can grant their visa application and allow them to return home.

Lawyer for the family, Carina Ford, said they are considering taking the matter to the High Court, the most superior court in Australia.

But she asked the Federal Government to stop fighting the family in court and allow them to return to their home community.

"There are several ministers who have always had the discretion within the immigration portfolio to release this family into the community while their legal matters are resolved," she said.

"That was the case in 2018, 2019 and 2020. It remains the case now, too.

"The family should be released immediately from detention and we hope that this will occur."

The full Federal Court, sitting as judges Geoffrey Flick, Richard White and Natalie Charlesworth, ruled in the family's favour by throwing out an appeal from the Federal Government.

The appeal challenged a prior ruling from Justice Mark Moshinsky that the family's youngest daughter was denied procedural fairness in her visa application.

The Murugappannan family on Tuesday said they would keep fighting to be able to go home to Biloela.

"Thank you to everyone in Australia for the support and love that they have shown us," they said.

" We are very grateful. It helps us stay strong.

"We just want to go back to Biloela. We need our little girls to be safe.

"Every day, they ask when can we go home?"

LONG FIGHT TO STAY IN BILOELA

Nades and Priya Murugappan came to Australia by boat in 2012 and 2013 respectively.

They settled in Biloela, a town of about 6000 in Central Queensland, and started a family, having Kopika, now 5, and Tharunicaa, 3.

The Federal Court judgment said the parents were considered "unauthorised maritime arrivals" under Australian law.

Although their daughters were born in Australia, their parents immigration status also made the two girls "unauthorised maritime arrivals", the judgment said.

In March 2018 the family were taken into detention after they were denied a visa which would allow them to stay in Australia.

In August 2019 they were transferred to Christmas Island.

They have fought to remain in Australia and Biloela ever since.

The Biloela community started the #HomeToBilo campaign which went national, calling on the government to allow the family to live in the community that has embraced them.

The #HomeToBilo campaign released a statement on Tuesday that said the family had been in detention for 1078 days.

"It has been nearly three years since our friends were taken from their home, from a loving community, and from safety," it said.

"Since then, there have been dozens of days in court and over a thousand days without freedom.

"We are deeply concerned about the ongoing wellbeing of our friends Priya, Nades and their beautiful girls.

"All of this suffering could have been avoided."

'OUR DAUGHTERS AREN'T ANCHOR BABIES'

Minister for Home Affairs Peter Dutton has said the Murugappanand parents had their children as "anchor babies" to be able to stay in the country.

Mrs Murugappanand has previously responded to Mr Dutton's claim that she and her husband had their children as "anchor babies" to allow them to stay in the country.

She said she had dreamt of having a family but her experiences in her homeland stopped her from doing that.

"When I came here I found someone I loved and had children. I never expected the Australian government not to give me a protection visa," she said.

"All we want now is for our children to live in a safe environment. Sri Lanka is not a safe place for us to go back to."

"We were mentally and physically tortured by the Sri Lankan government. We came here to find safety. We got married here and had children and we thought they would have a safer future here.

"All we want is for the Australian government to let us live here safely. We aren't asking for anything else and we will work very hard to look after ourselves."

Originally published as Reprieve for Qld asylum seeker family