Dotcom is a German-born businessman who has lived with his family in Queenstown, Mosgiel, near Dunedin, and Auckland.
He has New Zealand residency and has been fighting extradition since 2012 following an FBI-ordered raid on his mansion in Auckland.
The 52-year-old, who is on bail, was appealing a 2024 decision signed by Justice Minister Paul Goldsmith that he be extradited.
But the Court of Appeal found today there was no legal basis to block the extradition, according to a copy of the judgment.
He has one final route to appeal against the ruling, through New Zealand's top court, the Supreme Court.
Dotcom did not immediately respond to a request for comment via his lawyer today.
US authorities say Dotcom and three other Megaupload executives cost film studios and record companies more than $US500 million ($NZ880 million) by encouraging paying users to store and share copyrighted material, which generated more than $US175 million in revenue for the website.
