Lawyers for the Nobel peace laureate believe she will be released on Saturday regardless of the Supreme Court decision, but they had hoped she would also be acquitted to prove her innocence.
If she is freed, the 65-year-old, who has spent much of the past two decades locked up, will re-emerge into Myanmar's politics less than a week after a controversial election which saw the junta's proxies claim a landslide win.
Her lawyer Kyi Win confirmed the court's rejection of the appeal and said the case could be taken further, to the junta itself.
"We do not know the reason for the rejection yet. We just know that the case was rejected," he told AFP.
A Myanmar official, who spoke to AFP on condition of anonymity, said the chief justice of the Supreme Court had "confirmed the sentence" but gave no further details of the judgment.
Suu Kyi's detention was extended by 18 months in August last year over a bizarre incident in which an American swam uninvited to her lakeside home, where she is under house arrest, keeping her off the scene for the election.
Myanmar's generals stopped her National League for Democracy (NLD) from taking power after it won a landslide victory in the last poll in 1990, and she has spent many of the intervening years shut up in her crumbling Yangon home.
Officials said Wednesday that preparations for her expected release were under way, yet despite mounting hopes, some fear the military regime may still find a reason to extend her sentence.
If her release is allowed, it will be viewed by many observers as an effort on the regime's part to deflect criticism of Sunday's poll -- widely dismissed by the West as a sham, with Suu Kyi sidelined.
Her freedom is far from secured and observers believe it could come with hefty restrictions to ensure she cannot threaten the generals' carefully constructed power base.
Another of her lawyers, Nyan Win, said Wednesday she would hold a news conference at her party's headquarters if freed, suggesting she is likely to resist any attempt by the authorities to restrict her political activities.
He said the appeal against the house arrest sentence was only to argue her innocence and should not affect moves to free her.
"It's not important whether the acquittal coincides with her release date," he said.
The daughter of Myanmar's liberation hero General Aung San remains hugely popular in a country that has suffered under military rule for nearly half a century.
When the 65-year-old was last freed in 2002, she drew huge crowds wherever she went.
Maung Zarni, a Myanmar research fellow at the London School of Economics, said a potential release would provoke "massive media coverage" and make the public and opposition more confident.
"The whole of Yangon will want to catch a glimpse of her and the regime won't be able to stop the public going to see her," he told AFP.
Suu Kyi's absence from this year's election and the decision by the NLD to boycott the vote -- leading to its dissolution by law -- left Myanmar's opposition weakened and deeply split.
Early results from the poll suggest the regime-backed party has all but crushed its political rivals, amid opposition complaints of cheating and voter intimidation.
After the junta's proxy claimed a decisive victory, dashing the hopes of those pro-democracy parties that participated, attention has turned to whether anti-junta forces will regroup under Suu Kyi's leadership.
Suu Kyi's youngest son Kim Aris, 33, arrived in Bangkok ahead of the election and his mother's possible release. He is not thought to have seen his mother for a decade.
Source: AFP Global Edition