The law would have come into effect at the beginning of next year.
The governor of the Republican-ruled state, Jeff Landry, signed the law in June.
According to those in favour of the law, the Ten Commandments are fundamental to the legal system in the USA.
However, several families had filed a lawsuit against it.
They argued that the Christian commandments are purely religious and that children would be exposed to religious teachings that may contradict their parents' faith and world view.
Violation of the constitutional requirement
Judge John deGravelles ruled in favour of the plaintiffs. The children were to be forced to take part in a religious performance.
This violated the constitutional requirement that the state must not favour any religion.
Louisiana Attorney General Liz Murrill declared that she would appeal immediately.
The dispute over church and state is a perennial political issue in the USA.
Decades ago, the Supreme Court spoke out against regulations on compulsory Bible reading and organised prayer in state schools.
In recent years, however, it has tended to weaken the separation of church and state.
As a Republican presidential candidate, Donald Trump had praised Louisiana's law on his Truth Social platform.
It is possibly "the first significant step towards the renewal of religion".
Louisiana is located in the so-called Bible Belt in the south of the country and is the only state with such a provision.