The contract between ICANN and the US Department of Commerce National Telecommunications and Information Administration to perform the Internet Assigned Numbers Authority (IANA) functions expired at midnight on Friday.
A last-minute challenge filed by four US attorneys general was rejected by a judge in Texas on Friday afternoon.
The transition means that ICANN is now a non-profit organisation overseen by multiple stakeholders, including internet users, businesses, registries and governments.
The transition to the so-called multi-stakeholder model had been supported by ICANN itself, the US government and stakeholders, but had been repeatedly challenged by some US politicians.
They alleged that the transition involved giving away US property (the root file of internet addresses) without lawmakers' consent.
The rejection of the final challenge means the internet and domain name system, including rights protection mechanisms, will continue to operate as normal, said Jeff Neuman, senior vice president of Com Laude USA.
If the transition had not gone ahead, it would have led to "a loss of trust", he told Managing IP: "If that trust crumbles, then the rights protection mechanisms and everything considered sacred would crumble with it."
In a statement, ICANN said the transition validates the multi-stakeholder model and enhances its accountability.