Attorney General Mark Brnovich's office says Friday that it will appeal an order barring the state policy.
About 20,000 young immigrants in Arizona are protected from deportation under a 2012 program by the Obama administration.
The immigrants started getting licenses two months ago.
The denials were ordered by then-Gov. Jan Brewer, who cited a desire to reduce the risk of licenses being used to improperly access public benefits.
Last summer, an appeals court concluded there was no legitimate state interest in treating the immigrants differently from other non-citizens who could apply for licenses.
Instead, the court suggested Brewer's policy was intended to express hostility toward the immigrants.
"Driving is a privilege and not a right. Attorney General Brnovich believes it is up to each state, not the president, to determine who is eligible to receive a driver's license. The Governor recently transferred this case to the Attorney General's Office and it is now being reviewed to determine the best course of action."
Copyright 2015 The Associated Press modified.