The Supreme Court's decision marked the first time the controversial 2004 law has been applied. But the dual national said he will appeal the decision to Europe's human rights court, citing freedom of speech.
Denmark's Supreme Court on Wednesday upheld a lower court's ruling that effectively strips Danish-Moroccan bookseller Said Mansour of his citizenship.
French President Francois Hollande has abandoned planned constitutional reforms that would have stripped terrorists of their nationality. The proposals were first suggested in light of November's Paris attacks.
The 56-year-old dual national was convicted in July 2015 of instigating and promoting terrorism after he posted social media messages in support of al-Qaeda and its Syrian affiliate al-Nusra Front.
Last year, Mansour appealed against the lower court's decision to strip his Danish citizenship and have him deported after a four-year prison term. However, the Supreme Court rejected the appeal.
The ruling marks the first time a Danish citizen has had his citizenship revoked under a controversial law introduced in 2004.
Following "Islamic State"-claimed attacks in Paris last year, President Francois Hollande proposed similar legislation to strip convicted terrorists of their French citizenship.
However, he scrapped the proposed constitutional reforms following staunch criticism from human rights groups and international organizations.
Mansour denies the charges, claiming he has a right to freedom of speech.
The bookseller's defense lawyer told Danish television that his client would appeal the ruling to the European Court of Human Rights.
"He has a big connection to Denmark due to his long residence in the country, and his children and grandchildren are in the country. And finally, he has been punished for mere statements, not actions," his lawyer added.