The $4 billion Atlantic Yards project in Brooklyn took a major step forward yesterday when a federal judge dismissed a key lawsuit, removing a major hurdle that opponents had hoped would thwart the giant mixed-use development.

The project, which was approved by the state late last year, seeks to use eminent domain to clear property on a 22-acre site near downtown Brooklyn for a complex of 6,000-plus apartments and a Frank Gehry-designed basketball stadium for the New Jersey Nets.

The suit, filed by apartment owners, renters, and businesses, challenged the state’s right to acquire the land and hand it over to a private development company, Forest City Ratner, arguing that it did not fulfill a public purpose, as is required for eminent domain.

U.S. District Court Judge Nicholas Garaufis’s ruling rejected those arguments, bringing the state closer to moving forward with the property takings that would allow Forest City Ratner to begin construction of the complex.

A lawyer representing the project opponents, Matthew Brinckerhoff, vowed to appeal the decision, a move that he said would prevent the state from taking land for months.

“As long as this case is pending, they cannot proceed to the next step of the eminent domain process,” Mr. Brinckerhoff said.

The Spitzer and Bloomberg administrations, and Forest City Ratner, yesterday issued statements praising the case’s dismissal and hailing the benefits of the development.

“Today’s decision is an important victory not only for Atlantic Yards but for Brooklyn as well,” the chief executive of Forest City Ratner, Bruce Ratner, said in a statement.

A spokesman for the Empire State Development Corporation, Errol Cockfield, said the state wants to avoid using eminent domain and hopes landowners will settle with Forest City Ratner.

Should the development continue to be held up in court, the project could fall behind schedule; critics have questioned whether the Nets could move in for the 2009–10 season, as Forest City Ratner has suggested they will.