The verdict from Chief Justice James Allsop came following a unanimous decision from the three judges hearing the case in Melbourne on Sunday.
The ruling means nine-time champion Djokovic, will be unable to defend his title at the Australian Open, which starts on Monday.
He had been due to play his first-round match at the Australian Open against fellow Serbian Miomir Kecmanovic.
The three judges deliberated for a little over two hours before Allsop delivered the verdict just before 6 pm (0700 GMT).
There could yet be further legal processes but the decision means Djokovic faces being banned from Australia for three years.
Djokovic had appealed against his second visa cancellation after Immigration Minister Alex Hawke cancelled it on health and good order grounds.
At issue since the case erupted in early January has been whether Djokovic had the proper documentation to enter the country, which has some of the world's strictest entry policies due to the coronavirus pandemic.
The case of the 34-year-old Serbian, who has often spoken sceptically about coronavirus vaccines, has become a lightning rod, especially in a country that kept many of its own citizens locked out for months or years due to coronavirus concerns.
