U.S. District Judge Yvette Kane gave approval for the Jan. 20 rally after lawyers for the city of York and the Mississippi-based Nationalist Movement came to an agreement on issues including police protection.
Kane issued her order Friday.
The group said the City Hall rally and parade will pay tribute to Henry Schaad, a white police officer killed during the city's 1969 race riots, and protest the federal holiday honoring the slain civil rights leader.
York had rejected the application because it was incomplete, prompting a lawsuit by the Nationalist Movement. The city then decided no permit was needed because only 12 people were expected to attend – fewer than the 25-person cutoff in a city ordinance requiring permits, city spokesman Abe Amoros said.
"The city is barred from interfering in any way with the conduct of this event," said Richard Barrett, general counsel to the Nationalist Movement.
Mayor John Brenner did not immediately return a call for comment.
Schaad's widow had asked that the rally not be held.
White supremacist groups have targeted York after city police arrested nine white men, including former Mayor Charlie Robertson, last year in the shooting of a black woman days after Schaad was shot to death. Robertson was acquitted in October; two others were convicted.
Two black men were arrested last year in Schaad's killing.
Written By GEORGE STRAWLEY