The dispute will be one of the centerpiece cases of the court's current term. Obama's executive action was blocked by lower courts after Texas and 25 other Republican-governed states sued to stop it, contending he exceeded his presidential powers under the U.S. Constitution.
The administration said Texas and the other states don't even have the right to challenge the plan in federal court. The lower courts decided that Texas does have the right, or standing, to sue because at least 500,000 people living in Texas would qualify for work permits and thus become eligible for driver licenses, the cost of which are subsidized by the state. "Texas would incur millions of dollars in costs," the state said in its brief to the Supreme Court.
The nine justices will review a November ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that upheld a February 2015 decision by U.S. District Judge Andrew Hanen in Brownsville, a city along the Texas border with Mexico, to halt Obama's action. The justices also said they would consider whether Obama exceeded his authority under federal laws and the Constitution.
“President Obama’s executive actions rely on well-established constitutional authority, and I have full confidence that the Supreme Court will rule that these programs can be implemented,” Senate Minority Leader Harry Reid said in a statement.
Democratic presidential candidate Hillary Clinton also voiced her support for Obama's policy tweeting “action should be upheld so families can stay together and live without fear of deportation.”
But Republican presidential candidate Marco Rubio responded to the Supreme Court review news on Twitter, saying “I'm confident SCOTUS will agree Obama executive orders are unconstitutional,” adding “regardless, as president, I will end them.”
With some of his major legislative initiatives suffocated by Republican lawmakers, the Democratic president has resorted to executive action to get around Congress on issues including immigration, gun control and the Obamacare healthcare law. The most recent executive action came this month when he acted unilaterally to expand background checks for certain gun purchases.
His executive actions have antagonized Republicans who accuse him of unlawfully taking actions by executive fiat that only Congress can perform.
The future of the estimated 11 million immigrants living in the country illegally has been much discussed by Republican and Democratic presidential candidates. Clinton has pledged to go further than Obama to protect large groups of immigrants from deportation.
Republican candidate Donald Trump has proposed deporting all people who are living in the U.S. illegally, an idea embraced by some of his rival GOP candidates but dismissed by others. Obama said he was spurred to act on his own by Congress' failure to pass comprehensive immigration legislation. An earlier program that is not being challenged, Deferred Action for Childhood Arrivals, shields immigrants brought to the country illegally as children. More than 720,000 young immigrants have been granted permission under that program to live and work legally in the United States.
The White House also has shifted its enforcement actions to focus on criminals, those who pose a threat to national security or public safety, and recent border-crossers.
The change means that people who are here illegally but who are not otherwise violating the law are less likely to face deportation. About 235,000 people were deported in the federal fiscal year that ended Sept. 30, according to the Department of Homeland Security. That was the smallest number since 2006 and a 42 percent drop since a record high of more than 409,000 in 2012.
Still, the administration drew criticism from Democrats and immigration advocates for raids this month that resulted in the arrest of more than 120 immigrants from Central America who came to the country illegally since 2014. Those recent arrivals are not among immigrants who would benefit from Obama's plan.
The immigrants who would benefit from the administration's plan are mainly the parents of U.S. citizens and lawful permanent residents.
Those eligible to avoid deportation under Obama's action would be able to work legally and receive some federal benefits. States were not required to provide any benefits. The order expanded on a 2012 program that provided similar relief for people who became illegal immigrants as children.
The case is one of the most important the Supreme Court will decide this term, along with a challenge to a restrictive Texas abortion law. It could have repercussions beyond immigration because it would set a precedent for the circumstances under which states can sue the federal government over a whole range of executive actions. Future presidents, Republican or Democratic, could face new constraints on their power if the states win.
If the court sides with the Obama administration, Obama would have until his term in office ends in January 2017 to implement the immigration plan. With the U.S. presidential election looming in November, it would be up to the next president to decide whether to keep it in place.
Al Jazeera and wire services