San Mateo County Superior Court Judge Barbara Mallach ruled in the tentative decision that Khosla, who was sued last year by the Surfrider Foundation for blocking an access road to a property known as Martin's Beach, failed to obtain a required permit.
The ruling restores public access to the coastline, which is about 35 miles south of San Francisco, until a proper application has been approved, the decision said. Mallach stopped short of ordering fines.
"Today's decision is a huge victory for all of the people of California. It affirms that great wealth cannot be used to circumvent and ignore the law," said Surfrider attorney Joe Cotchett.
The group argued that closing the approach to the beach amounted to a violation of the California's Coastal Act, a state law that governs issues such as shoreline access.
In California, unlike in many other states, all beaches are open to the public under the constitution. But private landowners are not always required to allow access to the coastline across their properties.
In the case of Martin's Beach, the previous owner had allowed locals to access the beach for a fee. But Khosla, who owns the land via limited liability corporations, closed off the access road and hired guards to keep people out, infuriating locals.
"We are disappointed with the Court's decision and will consider our options for appealing the ruling," the defendants said in a statement, according to the Los Angeles Times.
The dispute is the latest in a line of California billionaires to clash with locals over property.
The fight echoes in particular record mogul David Geffen's long battle to prevent use of a walkway near his Malibu home. In 1983, Geffen agreed to allow a pathway to Carbon Beach when he sought permits for a pool and other additions, but he later filed a suit to fight the access.
In 2005, Geffen settled the suit and allowed the public walkway.
The row also evokes some other neighborly disputes in recent years involving wealthy technology executives including late Apple co-founder Steve Jobs and Oracle Corp founder Executive Larry Ellison.
Both sides have 15 days to object to the decision, court records show.