The judges said Brown must expand good-time credits that will allow inmates to finish their terms early, and "all such state and local laws and regulations are hereby waived, effective immediately."
The governor already has filed notice that he intends to appeal to the U.S. Supreme Court. The High Court has already kicked the case back down to the three-judge panel once before and the order makes it clear contempt of court is the next step if California disobeys again.
At issue is how far the state must go in reducing its inmate population to meet a previous court order to improve medical and mental health treatment. The courts have said overcrowding is the main cause of substandard care.
Various investigations have concluded the packed cells have contributed to substandard health and mental care.
"The judge's order is completely necessary in order to stop prisoners from getting sick and dying because of the Unconstitutional conditions in California's prisons," said inmate attorney Don Specter.
California has already shed more than 40,000 inmates since 2006.
Crime victims groups are stunned. They wonder who's left to release?
"The serious and violent folks that the prisons have not released yet. These are very dangerous people that will be coming into our communities," said Christine Ward with Crime Victims Action Alliance.
The plan Brown submitted to the court in May fell 2,300 inmates short of the judges' goal.
The Associated Press contributed to this report.