Durham District Attorney Tracey Cline and North Carolina Attorney General Roy Cooper's office had asked for the stay while they appealed the decision.
On Tuesday, Hudson ruled that Michael Dorman's attorneys had proven that evidence in the case was destroyed before they had a chance to examine it.
Dorman, 33, of Mebane was accused of killing 31-year-old Lakeia Boxely in 2008. According Cline, Dorman told a friend he killed Boxely in Durham and asked the friend to help dispose of the bones.
When Dorman was arrested, he told investigators he simply found the remains. Defense attorney Lawrence Campbell said police failed to preserve the bones so they could be examined by defense experts. Boxley's family had them cremated after they were released by the medical examiner's office.
Investigators and medical examiners have testified there was no plot to destroy evidence. Cline argued that the cremation of the remains was not a reason to allow a suspected killer to walk free. Cline said a portion of Boxley's skull was saved and is available for DNA testing.
Judge Hudson ordered Dorman held pending a mental evaluation of whether he is a danger to himself or others. He remained in custody Thursday.
Cline said Thursday that the Attorney General's office will appeal directly to the North Carolina Supreme Court.