She was found guilty of a drug trafficking charge - which carries a mandatory sentence of death by hanging.
Maria Elvira Pinto Exposto was exonerated by the High Court last December on grounds that she didn't know there were 1.5 kilograms of crystal methamphetamine in her bag when she was arrested in December 2014 at Kuala Lumpur's worldwide airport.
Customs officers found the drugs stitched into the lining of a bag that had been given to her by an online boyfriend, a man claiming to be "Captain Daniel Smith" from the US Special Forces.
Malaysia has a mandatory death sentence for anyone found guilty of carrying more than 50g of a prohibited drug.
Court of Appeal judge Mohtarudin Baki, told Ms Exposto: "The only sentence under the law is death by hanging".
An Australian grandmother has been sentenced to death for smuggling 1.5kg of crystal methamphetamine while traveling from Melbourne to Shanghai. He said they would be appealing in the federal court.
"There was clear evidence that she was the victim of an Internet romance scam", Exposto's lawyer, Tania Scivetti, told The Associated Press.
Exposto previously told lawyers she believed the suitcase she was carrying during her arrest contained only clothes that a stranger in Shanghai had asked her to take to Melbourne.
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It added the Chinese Government told the embassy it is also investigating and taking appropriate measures. It didn't further identify the person with the symptoms or say when they had been detected.
In Malaysia, there is now a mandatory death penalty for anyone found with more than 50g of an illegal drug.
The grandmother-of-three was acquitted of all charges in December a year ago, but the ruling was later overturned after prosecutors appealed.
However, she was unable to leave the country after case prosecutors made a decision to repeal the case, asking that the older woman instead be sentenced to death.
Ms Exposto's lawyer Shafee Abdullah today told the court her client would exercise her right for a further appeal.
She said yes. Then, while changing flights at Kuala Lumpur International Airport, she mistakenly went through immigration.
Shafee, Exposto's other lawyer, called it "a perverse judgment, no reasons were provided".
In a statement on Thursday evening Foreign Minister Julie Bishop said "Australia opposes the death penalty in all circumstances for all people".
Malaysia has executed three Australian nationals for drug trafficking in the past 30 years, leading to brief strains in diplomatic ties between the two countries. She said the Department of Foreign Affairs and Trade would work to help Exposto avoid the death penalty.