In a surprise ruling, the court said Sayedee should spend "the rest of his natural life" in jail, Attorney General Mahbubey Alam said.
"We had expected that the court would uphold his death sentence," Alam told reporters.
Lawyers for Sayedee said they were not satisfied with the court's ruling on the 74-year-old, who was convicted last year on eight counts including murder, rape and persecution of the country's minority Hindu community.
"He should have been acquitted of all charges as the case was tainted by a number controversies," Khandaker Mahbub Hossain told reporters.
Last February's judgement by a war crimes court triggered weeks of bloody protests left more than 100 people dead and plunged the impoverished nation into a major crisis.
Security was tightened nationwide ahead of Wednesday's ruling, with thousands of police, the elite security force, Rapid Action Battalion, and the paramilitary border guards being deployed in major cities and towns.
Sayedee, vice-president of the Jamaat-e-Islami party, was one the country's most popular preachers with millions of followers.
In his heyday he would draw hundreds of thousands to his preaching sessions, and CDs of his speeches were top sellers.
He has said the original judgement was influenced by "atheists" and pro-government protesters who wanted to see him executed.
COMMENTS (10)
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@M. G. Mustafa Islam doesnt only belongs to you so do not include person like me in your class. He is a criminal
He is an innocent person.. He should not get such a borbar panishment.. He is a real leader of islam. We should be with him....
I think he was given the death penalty for having that horrible looking beard.
This is a big mistake and sends the wrong message to perpetrators of terrorism and genocide. There should be no leniency shown to mass killers.
Let us not be blood thirsty. As long as he is in jail for good it is fine and fair.
These Hindu fanatics sided with India against Pakistan and fellow Bengalis. Liars invented these charges against a respected and revered scholar of Islam.
This man is innocent. UN, Amnesty declared evidence fraudulent and insufficient to convict him.
This man suppose to deserve capital punishment.
Dirty politics, it is...
MURDER, RAPE by Jamaat-e-Islami Leader.........speechless!