Last September, Nottinghamshire County Council said siblings outside a school's catchment area would no longer be given preference over non-siblings.
Parents from one school appealed to the Schools Adjudicator who ruled the admission rule was "unfair" and should be "revised".
The council said it would "comply".
The ruling only applies to High Oakham Primary School, Mansfield, but the council said it was likely the policy would be revised for all county schools.
Adjudicator Dr Bryan Salter said his ruling could not be applied retrospectively meaning siblings already split up would not necessarily be reunited.
Parent Sarah Lawrence, who had two boys separated by the ruling, said she was "pleased" with the decision but was still upset with the council.
"They are putting a lot of spin on a difficult situation. We want them to fix it for the families already affected by the change."
She said the Fairness 4 Siblings group, who brought the appeal, were calling for an independent review of the council's policy.
Another parent, Kris Ambler, said: "The council needs to put its hand up and say 'we made a mistake'."
Ms Lawrence said her two sons Josh and Elliott had been reunited but only after the family decided to move the older boy to his brother's school.
Marion Clay, from Nottinghamshire County Council, said: "It (the ruling) does not look back, it only looks to the future so the arrangements that were in place still stand - it would be very difficult to unpick."
She said admissions policy was very complex so "every year there are groups of parents who find themselves in this situation - and this will not change that."
Parents have won a battle over a local authority's decision to stop giving priority places to children with an older brother or sister at school.