Justice Helen Winkelmann found the warrants used did not adequately describe the offences to which they were related.
"Indeed they fell well short of that. They were general warrants, and as such, are invalid."
Justice Winkelmann's judgement, released a short time ago, ordered that no further items removed in the raids could be removed from New Zealand.
And she told the Attorney-General to return clones of the hard drives currently held by New Zealand police.
The decision followed a hearing at the High Court in Auckland last month.
Kim Dotcom cried in court as his lawyer spoke of how he was "ripped from his family" during a dawn raid by police at the request of US authorities.
Dotcom, who was arrested alongside three associates, had argued for copies of the data on 135 computers and hard drives seized when police raided his $30 million home in Coatesville.
His lawyer Paul Davison QC said his client's rights had been "subverted" after cloned copies of the hard drives were taken overseas by the FBI without his lawyers knowing.
Mr Davison told the court he wrote to Crown lawyers in February to ask that none of the data from Dotcom's computers leave New Zealand.
Mr Davison said Crown lawyers responded, saying: "The evidence is required in its original form to be sent to the US. That has not happened and will not happen without prior warning."
He said he was told the FBI had been in New Zealand and made clones of the data on the computers and one copy would be made available to him.
Mr Davison said he had yet to receive that copy and was only told today that copies had been sent to the US.
"There has been no approval for removal."
Mr Davison also said there had been an "excess of authority".
"Here is an example of what I would submit at the most moderate was high-handed and at the worst misleading."
He said the process was "off the rails" and his client's rights had been "subverted".
Dotcom wiped tears from his eyes and left court as Mr Davison said his client had been "ripped from his family" and was now before the court asking for the legitimacy of the police actions to be looked at.
Justice Helen Winkelmann said she wanted an affidavit from Crown lawyers that would clarify whether or not the Solicitor General gave police permission to allow copies of the data on Dotcom's computers to be taken to the US.
Crown lawyer Mike Ruffin said the original police search warrant, signed by a district court judge, made it clear that the computers and hard drives would be taken to the US.
He said a proposal by Dotcom to have a judicial review of the information was "not practical because of the volume of the data".
Mr Ruffin said copies of Dotcom's computers and hard drives could not be handed over because investigators were not yet able to determine what is relevant to the case and what is not.
Dotcom faces an extradition hearing in August which will determine whether or not he is to fly to the US to face charges including copyright infringement and wire fraud relating to the file-sharing website Megaupload.
Prosecutors allege a "mega conspiracy"; Dotcom denies the charges and says his website was legitimate.
Police said they were considering the judgement and are in discussions with Crown Law to determine what further action might be required.
They would not make any comment until that process was complete.
