Thousands of demonstrators are expected to attend the rally to highlight what the United Nations has described as "worsening famine conditions" in Gaza.
Police on Saturday implored those planning to take part to act peacefully and respectfully, warning them they would be closely monitored.
Supreme Court Justice Belinda Rigg rejected an application on behalf of the NSW police commissioner to shut down the Sunday march on public safety grounds.
Organised by the Palestinian Action Group Sydney, the protest has garnered support from activists nationwide, human rights and civil liberties groups as well as several MPs and public figures such as former Socceroo Craig Foster.
Justice Rigg said in her judgment that arguments the rally would cause disruption were not sufficient to bar the protest.
"It is in the very nature of the entitlement to peaceful protest that disruption will be caused to others," she said.
She noted there was significant support for the march from hundreds of organisations including Amnesty International, various churches, the Jewish Council of Australia, the nurses and midwives association and other trade unions.
The decision means protesters will have legal immunity and protections around offences like blocking or obstructing traffic or pedestrians.
Police were "scrambling" to alert road users that the bridge would be closed for the protest but would have the "whole gamut" of officers there to monitor the demonstration, acting deputy commissioner Peter McKenna said.
"We are there to keep everyone safe ... we will have police right along the route and we'll be making sure this is done as safely and peacefully as possible," he told reporters on Saturday.
"Anyone who thinks they're going to come along and hijack this protest or do the wrong thing, police will take swift action."
Greens MP Sue Higginson described the court decision as a win for humanity and a defeat for the "anti-protest Minns Labor government".
"The court was crystal clear that a protest being inconvenient does not mean it can be stopped. In fact, that's the whole point of the protest," she said.
Protesters are expected to march from the CBD to North Sydney, with the bridge closed from 11.30am to about 4pm.
Police Minister Yasmine Catley urged people to avoid the city if possible.
"Make no mistake there is going to be massive, massive disruption ... there will be significant delays," she said.
"But we believe police will be able to handle the protest on the bridge so long as people are peaceful, that they listen to what police ask them to do and that they are sensible."
In solidarity with their interstate peers, protesters in Melbourne are also gearing up to rally through the city's CBD, aiming to reach the King Street Bridge.
Executive Council of Australian Jewry CEO Alex Ryvchin said there was "a lot of dismay in the community and wider society that a single judge has overruled a decision of the police and the elected government made in the interests of public safety".
Meanwhile, more than 60 per cent of Australians want tougher government measures to stop Israel's military offensive in Gaza, a poll has found.
Respondents to the YouGov survey published on Friday and commissioned by the Australian Alliance for Peace and Human Rights believe Prime Minister Anthony Albanese's condemnations of Israel have fallen short.
More than 60,000 Palestinians have been killed including more than 17,000 children, according to local health authorities, with reports of dozens of people dead in recent weeks due to starvation.
Israel's campaign began after Hamas attacked Israel on October 7, 2023, reportedly killing 1200 people and taking 250 hostages.
