Human Rights Watch condemned the court decision, decrying what it called Anwar's persecution which it said put at risk the democratic freedom of all Malaysians.
Anwar, the ruling party's rising star in the mid-1990s before he fell out with then Prime Minister Mahathir Mohamad, denied the charge that led to his second conviction for sodomy saying it was politically motivated.
"I will walk again for the third time into prison but rest assured that I will walk in with my head held high," a defiant Anwar said in a statement he read out in court.
"I maintain my innocence. This to me is a complete fabrication coming from a political conspiracy to stop my political career."
Prime Minister Najib Razak's government has rejected any suggestion of interference in the case.
"Malaysia has an independent judiciary, and there have been many rulings against senior government figures," the government said in a statement after the ruling.
Anwar criticised the court saying that in rejecting his appeal it was "bowing to the dictates of the political masters".
"You chose to remain on the dark side and drown your morals and your scruples in a sea of falsehood and subterfuge," he told the judges.
Anwar later comforted his wife and children and had a meal with them before being taken to the Sungai Buloh prison, about 30 km (20 miles) from Kuala Lumpur.
A court found the 67-year old former deputy prime minister guilty in March last year of sodomising a former political aide.
The conviction disqualifies him from political office and contesting the next election that must be held by 2018.

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