The Council of State ruled that while the cutouts "could be seen as conveying stereotypes that demean women" the exhibition did not constitute a "serious breach...of the right to respect for human dignity."
The 65 life-size silhouettes installed around the eastern town of Dannemarie as part of a "women's year" had divided residents.
One depicted a woman in high heels sitting astride a chair and another a woman sitting on the ground with one knee raised and her back arched.
Others depicted pregnant women, women carrying babies, women carting shopping bags or striding down the street in a short skirt.
Feminist groups argued that they were sexist.
But many locals had taken them to their bosom and took them into their homes after a Strasbourg court in early August ordered they be removed.
The Council of State overturned that ruling.