The Minnesota Court of Appeals has struck down a state rule that required builders to install firefighting sprinkler systems in new townhouses and single-family houses unless those homes were one story and less than 4,500 square feet.

The Builders Association of the Twin Cities challenged the rule, calling it arbitrary, costly and beyond the authority of the Minnesota Department of Labor and Industry.

In a decision announced Tuesday, the appeals court said there was no evidence that justified exempting one-story houses under 4,500 square feet, so the rule was invalid.

“We are satisfied with what the court did,” said David Siegel, executive director of the builders association. “It made a very reasoned and wise ­decision.”

The Department of Labor said it is studying the decision. It has 30 days to decide whether to appeal to the state Supreme Court.

The sprinkler rule has caused controversy since the Labor Department suggested it in 2012. The initial proposal required sprinkler systems in all new one- and two-story family dwellings. Builders fought the change, and an advisory committee to the Labor Department voted to remove the mandate.

The proposal eventually evolved into a rule that required sprinkler systems in new townhouses and one- and two-story family dwellings, but exempted one-story houses under 4,500 square feet.

The rule took effect in January 2015. Since then, Siegel estimated that sprinkler systems have been installed in hundreds of new homes around the state.

As a result of the appeals court decision, such installations will now stop. They will begin again only if the Labor Department successfully appeals to the state Supreme Court.

The Builders Association of the Twin Cities argued that mandatory sprinkler systems added to construction costs and priced some buyers out of the market for new construction. A system in a 4,500 square-foot house cost about $9,000, Siegel said. Meanwhile, he added, the safety advantages were unclear.

Hard-wired interconnected smoke detector systems required in Minnesota for the past 20 years have provided the protection needed from residential fire deaths, Siegel said.

The appeals court judges made clear that they had not ruled that the Labor Department “is not permitted to balance the life safety benefits of sprinkler systems with the costs, but rather we are saying that this record does not contain a reasoned explanation” for how exempting one-story houses less than 4,500 square feet “provided that appropriate balance.”