A federal appeals court has dealt the latest setback to the controversial project, testing Trump's presidential authority.
He has vowed to appeal to the Supreme Court. "Whether or not a massive ballroom should be constructed is for Congress to decide and is not a matter for Executive self-help," the panel's majority said.
The order upholds a preliminary injunction won by the National Trust for Historic Preservation, which sued after the administration tore down the East Wing last year to begin the project without congressional approval.
The three-judge panel, in a 2-1 decision, said: "Each President is a temporary tenant, not the owner, of the White House and its Executive Residence." "The President has no - and claims no - constitutionally assigned authority over that property, which is designed and maintained for the use of all Presidents, current and future, and for the American people," the judges said.
Trump railed against the "horrendous" and "politically motivated" decision on social media, highlighting the dissenting judge's opinion that the order is "a blatant abuse of discretion".
He said the military and Secret Service viewed the ruling as a national security threat.
Jane Hill presents BBC News at Ten reporting by Sarah Smith in Washington.
