Mwambutsa led Burundi at independence from Belgium in 1962, but was deposed just four years later in a dispute linked to rivalries between ethnic Tutsis and Hutus, which still haunt the country.
The monarch died in Switzerland in 1977, leaving clear instructions that his remains should never be returned to Burundi.
But his daughter and the Burundian government campaigned for his remains to be repatriated, reportedly hoping to use the occasion to organise a ceremony promoting national reconciliation.
In 2012, one of the king's relatives authorized the exhumation of his remains ahead of an eventual repatriation.
Mwambutsa's niece princess Esther Kamatari opposed the process insisting the king's last wishes should be honoured.
Switzerland's federal court, the nation's highest legal authority, has sided with Kamatari, the ATS news agency said.
The judges upheld a ruling issued last year by a lower court in Geneva.
Amid the legal back and fourth following his exhumation, Mwambutsa's remains have been held in a cold-storage facility at a Geneva funeral home for the past five years.
Kamatari fled Burundi herself in 1970, ultimately settling in Paris where she worked as a model, including for top designers like Christian Dior and Yves Saint Laurent.
She voiced interest in contesting in Burundi's 2004 presidential election but never made it onto the ballot.
Burundi has been seized by crisis for two years, since President Pierre Nkurunziza sought a third term. The turmoil has left an estimated 500 people dead, according to the UN.