The following from A.W. Pink’s Doctrine of Justification.
Justification, then, refers not to any subjective change wrought in a person’s disposition, but is solely an objective change in his standing in relation to the law. That to justify cannot possibly signify to make a person inherently righteous or good is most clearly to be seen from the usage of the term itself in Scripture. For example, in Proverbs 17:15 we read, “He that justifieth the wicked, and he that condemneth the just, even they both are abomination to the LORD”: now obviously he who shall make a “wicked” person just is far from being an “abomination to the LORD,” but he who knowingly pronounces a wicked person to be righteous is obnoxious to Him.
Again; in Luke 7:29 we read, “And all the people that heard Him, and the publicans, justified God”: how impossible it is to make the words “justified God” signify any moral transformation in His character; but understand those words to mean that they declaredHim to be righteous, and all ambiguity is removed. Once more, in 1 Timothy 3:16 we are told that the incarnate Son was “justified in (or “by”) the Spirit”: that is to say, He was publicly vindicated at His resurrection, exonerated from the blasphemous charges which the Jews had laid against Him.
Justification has to do solely with the legal side of salvation. It is a judicial term, a word of the law courts. It is the sentence of a judge upon a person who has been brought before him for judgment. It is that gracious act of God as Judge, in the high court of Heaven, by which He pronounces an elect and believing sinner to be freed from the penalty of the law, and fully restored unto the Divine favour. It is the declaration of God that the party arraigned is fully conformed to the law; justice exonerates him because justice has been satisfied. Thus, justification is that change of status whereby one, who being guilty before God, and therefore under the condemning sentence of His Law, and deserving of nought but an eternal banishment from His presence, is received into His favour and given a right unto all the blessings which Christ has, by His perfect satisfaction, purchased for His people. . . .
From what has been before us, we may perceive what justification is not. First, it differs from regeneration. “Whom He called, them He also justified” (Rom. 8:30). Though inseparably connected, effectual calling or the new birth and justification are quite distinct. The one is never apart from the other, yet they must not be confounded. In the order of nature regeneration precedes justification, though it is in no sense the cause or ground of it: none is justified till he believes, and none believe till quickened. Regeneration is the act of the Father (James 1:18), justification is the sentence of the Judge. The one gives me a place in God’s family, the other secures me a standing before His throne. The one is internal, being the impartation of Divine life to my soul: the other is external, being the imputation of Christ’s obedience to my account. By the one I am drawn to return in penitence to the Father’s house, by the other I am given the “best robe” which fits me for His presence.
Second, it differs from sanctification. Sanctification is moral or experimental, justification is legal or judicial. Sanctification results from the operation of the Spirit in me, justification is based upon what Christ has done for me. The one is gradual and progressive, the other is instantaneous and immutable. The one admits of degrees, and is never perfect in this life; the other is complete and admits of no addition. The one concerns my state, the other has to do with my standing before God. Sanctification produces a moral transformation of character, justification is a change of legal status: it is a change from guilt and condemnation to forgiveness and acceptance, and this solely by a gratuitous act of God, founded upon the imputation of Christ’s righteousness, through the instrument of faith alone. Though justification is quite separate from sanctification, yet sanctification ever accompanies it.
Third, it differs from forgiveness. In some things they agree. It is only God who can forgive sins (Mark 2:7) and He alone can justify (Rom. 3:30). His free grace is the sole moving cause in the one (Eph. 1:7) and of the other (Rom. 3:24). The blood of Christ is the procuring cause of each alike: Matthew 26:28, Romans 5:9. The objects are the same: the persons that are pardoned are justified, and the same that are justified are pardoned; to whom God imputes the righteousness of Christ for their justification to them He gives the remission of sins; and to whom He does not impute sin, but forgives it, to them He imputes righteousness without works (Romans 4:6–8). Both are received by faith (Acts 26:18, Romans 5:1). But though they agree in these things, in others they differ.
God is said to be “justified” (Rom. 3:4), but it would be blasphemy to speak of Him being “pardoned”—this at once shows the two things are diverse. A criminal may be pardoned, but only a righteous person can truly be justified. Forgiveness deals only with a man’s acts, justification with the man himself. Forgiveness respects the claims of mercy, justification those of justice. Pardon only remits the curse due unto sin; in addition justification confers a title to Heaven. Justification applies to the believer with respect to the claims of the law, pardon with respect to the Author of the law. The law does not pardon, for it knows no relaxation; but God pardons the transgressions of the law in His people by providing a satisfaction to the law adequate to their transgressions. The blood of Christ was sufficient to procure pardon (Eph. 1:7), but His righteousness is needed for justification (Rom. 5:19). Pardon takes away the filthy garments, but justification provides a change of raiment (Zech. 3:4). Pardon frees from death (2 Sam. 12:13), but righteousness imputed is called “justification of life” (Rom. 5:18). The one views the believer as completely sinful, the other as completely righteous. Pardon is the remission of punishment, justification is the declaration that no ground for the infliction of punishment exists. Forgiveness may be repeated unto seventy times seven, justification is once for all. [source]