The review will examine whether UK-Saudi weapons deals breach British or EU arms export laws after a formal legal challenge was submitted by solicitors on behalf of the Campaign Against Arms Trade [CAAT] earlier this year.
The review comes as campaigners argue that British-made weapons are being used by Saudi Arabia to commit human rights violations and kill civilians in Yemen.
"We believe that the UK government is fully complicit in the destruction of Yemen," CAAT spokesman Andrew Smith told The New Arab news website late on Thursday.
"This is a historic decision and we welcome the fact that arms exports to Saudi Arabia will be given full scrutiny of a legal review," he added.
While the oil-rich Saudi kingdom buys most of its advanced weaponry from the US, it has major contracts worth billions with key EU powers - led by Britain.
"The fact that UK aircraft and bombs are being used against Yemen is a terrible sign of how broken the arms export control system is," Smith told The New Arab.
"For too long government has focused on maximizing and promoting arms sales, rather than on the human rights of those they are used against," he added.
"It has supported Saudi Arabia politically and militarily since day one. We want the government to end all arms sales to Saudi Arabia and end its complicity in the destruction of Yemen."
The court ruled for hearings to commence by February 1, 2017.
The High Court judge called on the British government to reject all new export licenses and suspend current exports until the review has been finalized.
The war in Yemen has left some 6,400 people dead, with more than 80 percent of the population in desperate need of humanitarian aid, according to the UN.