The 36-year-old Sri Lankan man had been found to be a refugee, but was refused a protection visa after the ASIO assessment.
He has been detained for the past three years and is one of 55 other refugees in a similar situation.
He took the matter to the High Court, which on Friday ruled that the public interest test, which is used to reject visa applications on security grounds, is invalid because it is inconsistent with Australia’s Migration Act.
The refugee’s lawyers say he should be released as soon as possible, along with all other refugees who are being detained indefinitely.
But Ms Roxon says the man will remain in detention while Immigration Minister Chris Bowen and the Department of Immigration make a new decision on his application for a protection visa.
“The case has upheld the process that ASIO has undertaken for its adverse security assessment, but it found one of the migration regulations to be invalid. That means that the particular plaintiff has to have his case reassessed,” she told 7.30.
“The consequences for others will depend on circumstances for each of those, and of course the Government is carefully considering and will quickly consider implications for the 50 or so people who are in similar circumstances.”
She says the man can still have the ASIO assessment used against him as he applies for a protection visa.
“What the decision has declared invalid is a migration regulation that says you are not allowed under any circumstances to give a visa to someone who has an adverse security assessment,” she said.
“The judges say the decision now has to be remade with respect to this one individual and they explicitly say by a majority that he is to remain in detention while that is done.”
The Federal Opposition says it believes new immigration laws are needed to combat the High Court’s decision.
Opposition immigration spokesman Scott Morrison says the ruling could allow people who are a security risk to get visas.
He says he will support any new laws to protect national security.