Swedish prosecutors issued the warrant for Assange, 45, in August 2010 based on allegations of sexual assault by two female WikiLeaks volunteers in the country and have for years sought his extradition.
He has been holed up inside the Ecuadorian embassy in London since 2012. Ecuador granted Assange political asylum after he said he feared an extradition
to Sweden could lead to another extradition to the United States, where he could face the death penalty if he is charged and convicted of publishing government secrets through WikiLeaks.
The order from the Swedish appeals court
said that Assange "is still detained in absentia," adding that it "shares the assessment of the (lower) district court that Julian Assange is still suspected on probable cause of rape... and that there is a risk that he will evade legal proceedings or a penalty."
It was the eighth time the European arrest warrant has been tested in a Swedish court, with all seven previous judgments also having gone against Assange.
WikiLeaks tweeted a statement from Assange's legal team Friday after the decision, saying their client was "disappointed."
"Mr. Assange will appeal the decision and remains confident that his indefinite and unlawful detention will cease and that those responsible will be brought to justice," the statement said.
The decision comes a day after WikiLeaks released medical records claiming that Assange's mental health would be adversely affected if he remained holed up in the embassy.
"Mr. Assange's mental health is highly likely to deteriorate over time if he remains in his current situation ... It is urgent that his current circumstances are resolved as quickly as possible," said a report published by the organization on Twitter.
A 27-page medical analysis,
which was attributed to an unnamed "trauma and psychosocial expert" in London and dated December 11, 2015 was published alongside supporting documentation.
Assange's legal team has intensified its calls for Sweden to adhere to a non-binding opinion by the United Nations working group on arbitrary detention, which stated in February that their client's confinement in the embassy should be considered as arbitrary detention enforced by Sweden and Britain.
On Thursday, Assange said he would agree to serve prison time in the United States in exchange for President Barack Obama granting clemency to imprisoned former Army intelligence analyst Chelsea Manning, the group's Twitter account said .
"If Obama grants Manning clemency, Assange will agree to US prison in exchange -- despite its clear unlawfulness," the group said.
Assange attorney Barry Pollack told CNN Thursday the deal would have to include a pardon for Manning, who was convicted
in 2013 of stealing and disseminating 750,000 pages of documents and videos to WikiLeaks in what has been described as the largest leak of classified material in US history. Manning was found guilty of 20 of the 22 charges against her, including violations of the US Espionage Act.
Thursday's tweet offering the deal was posted along with a letter from Pollack addressed to Attorney General Loretta Lynch that pressed the Department of Justice to provide information about its ongoing criminal investigation into his client.
Pollack argued in the letter, which was written last month, that over the course of the investigation into Assange, which is in its sixth year, the Justice Department "revised the department's regulations with respect to obtaining evidence from and charging members of the news media."
Pollack also said "the department publicly announced it was closing its criminal investigation of the handling of classified information by Hillary Clinton," as another development that justifies more transparency into the case against Assange.
The Justice Department told CNN it was unaware of any deal being offered by Assange or his representatives. An official with the US Attorney's Office of the Eastern District of Virginia, where he would be prosecuted, had no comment.