FIFA's ruling led to Sion's exclusion from the Europa League on September 2nd after the Swiss club were found guilty of fielding ineligible players.
Scottish club Celtic were handed their place in the group stages despite losing the play-offs 3-1 on aggregate.
The Swiss side took their case to several regional courts and a court in Martigny ruled in their favour, thus allowing the six banned players to return.
FIFA appealed that decision in the Valais cantonal court, which "overturned the decision" of the local courts, according to FIFA. The court instead "upheld the appeal submitted by FIFA and the Swiss Football League".
"The cantonal court has thus indirectly taken the same view as FIFA and the SFL and its ruling has indirectly confirmed the legality of the transfer ban FIFA imposed on" FC Sion, said FIFA in a statement.