* Lower courts blocked Trump move to rescind DACA as unlawful
* Supreme Court to hear case in term that begins in October (Adds California attorney general and Justice Department comments, background on immigration dispute and congressional action)
By Lawrence Hurley
WASHINGTON, June 28 (Reuters) - The U.S. Supreme Court on Friday agreed to decide whether President Donald Trump acted lawfully when he moved to end a program that protects from deportation hundreds of thousands of immigrants who were brought into the country illegally as children, a key element of his hardline immigration policies.
The nine justices took up the Trump administration's appeals of lower court rulings in California, New York and the District of Columbia that blocked as unlawful his 2017 plan to rescind the Deferred Action for Childhood Arrivals (DACA) program implemented in 2012 by his Democratic predecessor Barack Obama.
The program currently shields about 700,000 immigrants often called "Dreamers," mostly Hispanic young adults, from deportation and provides them work permits, though not a path to citizenship.
The conservative-majority Supreme Court will hear arguments and issue a ruling during its next term, which starts in October and runs through June 2020, meaning a decision could come in the thick of next year's presidential race in which Trump is seeking re-election. Democratic presidential candidates including front-runner Joe Biden have pledged actions to protect the Dreamers and offer them citizenship.
Three federal district court judges issued orders halting Trump's move to end DACA after lawsuits were filed by a group of states including California and New York, people protected by the program, civil rights groups and others challenging the legality of the Republican president's move.
Trump, Republicans in Congress and Democratic lawmakers have been unable to hammer out a legislative deal to protect "Dreamers." The Trump administration has argued that Obama exceeded his constitutional powers when he bypassed Congress and created DACA.
In the meantime, the program, in which those eligible can get renewable two-year work permits, remains in effect for people already enrolled. New applications are not being accepted by Trump's administration. Since January 2018, the administration has issued more than 373,000 renewals, according to U.S. Citizenship and Immigration Services data.
"DACA reflects our nation's commitment to helping hard-working people and creates hope and opportunity for a new generation - many of whom were brought to our country as toddlers," said California Attorney General Xavier Becerra, a Democrat, who leads one of the legal challenges.
"So far, both lower courts in our legal fight to protect DACA have agreed with us that the Trump administration's attempt to end it was unlawful," Becerra added.
Justice Department spokesman Alexei Woltornist welcomed the Supreme Court's action. "We are pleased the Supreme Court agreed that this issue needs resolution," Woltornist said.
The Democratic-led House of Representatives on June 4 passed a bill that would protect "Dreamers" but the Republican-controlled Senate has shown no sign of approving it. Dick Durbin, the No. 2 Senate Democrat, on Friday urged the Senate to pass the legislation.
The legal question before the Supreme Court is whether the administration properly followed a federal law called the Administrative Procedure Act in Trump's plan to end DACA. The administration appealed in November and the Supreme Court could have acted on it as early as January, but delayed action for half a year before taking up the matter.
The court's announcement came a day after it issued a 5-4 ruling on last official day of its 2018-2019 term, dealing a major setback to Trump's plan to add a contentious citizenship question to the 2020 census.
In another important immigration-related case, the Supreme Court last year upheld Trump's travel ban targeting people from several Muslim-majority countries.
Trump's effort to rescind DACA, even as he has said "I love these kids," is part of his tough stance on immigration, which has become a prominent feature of his presidency and his re-election campaign. Trump has backed limits on legal and illegal immigration and has sought construction of a wall along the U.S.-Mexican border since taking office in January 2017.
Under Trump's September 2017 decision to rescind DACA, protections for Dreamers were to have begun phasing out in March 2018. But lower courts directed the administration to continue processing renewals of existing DACA applications while the litigation was resolved.
Obama created DACA by executive action in 2012 as what he called "a temporary stop-gap measure" after the failure in Congress of bipartisan legislation called the Dream Act that would have provided a path to citizenship to young immigrants brought by their parents illegally into the country as children.
When he created DACA, Obama said the people it protected were raised and educated in the United States, grew up as Americans in their hearts and minds, and may know little about their countries of origin.
The Trump administration said Trump possesses the authority to end a program implemented by a previous president, acted lawfully in seeking to rescind it and that courts should have no say in the matter.
The administration sought to bypass the normal court process, filing papers on Nov. 5 asking the high court to intervene even before some federal appeals courts considering the matter had issued rulings.
Since then, on Nov. 8, the San Francisco-based 9th U.S. Circuit Court of Appeals upheld District Judge William Alsup's January 2018 ruling against Trump, saying the challengers provided evidence of "discriminatory motivation, including the rescission order's disparate impact on Latinos and persons of Mexican heritage."
The Richmond, Virginia-based 4th U.S. Circuit Court of Appeals subsequently ruled against Trump last month. Two federal appeals court have yet to issue rulings.
Also among those suing the administration to preserve DACA were the University of California, labor unions and Microsoft Corp, which expressed concern its own employees would be affected.
For a graphic on major Supreme Court rulings, click tmsnrt.rs/2V2T0Uf
Reporting by Lawrence Hurley; Additional reporting by Richard Cowan; Editing by Will Dunham