Badr Hashim Khamis Abdallah al-Jabr was found guilty of stabbing Lauren Patterson and then burning her body in the Qatari desert in October 2013.
"The defendant was fully aware of the consequences of his actions," Doha's court of cassation ruled.
It said that Jabr, who was not in court, should face the death penalty, the original verdict handed down in 2014.
Use of capital punishment is rare in Qatar, with the last known case of the death penalty being carried out thought to date back to 2003.
The judge said that any death penalty would be carried out by hanging or shooting.
Lauren's mother, Alison, who has regularly travelled to the Gulf for hearings, was in court on Sunday.
She wept as details of the crime were read out and afterwards hugged other family members and friends who were present.
Earlier this month, she said before the same court that she did not want to forgive Jabr, although she had told AFP she did not believe in the death penalty.
Jabr had previously been convicted of the murder and sentenced to death, but that ruling was quashed, prompting Sunday's retrial.
In a lengthy verdict read out in court on Sunday, the judge dismissed all aspects of Jabr's defence.
The defence argued at various times that he had acted in self-defence, was mentally incapable at the time of the murder, was interrogated by police without a lawyer and that the young teacher had committed suicide.
He recounted how the Qatari and the British teacher had met at a central Doha hotel.
They then left the hotel and went back to a property owned by Jabr, where they had sex, said the judge.
Previous court evidence had heard the schoolteacher had been sexually assaulted.
It was afterwards that Jabr attacked Patterson, a teacher in Qatar from Kent in southeast England, stabbing her with a knife which had a 20-centimetre (almost eight-inch) blade, the court heard.
Her body was then taken to the desert and burned on charcoal bricks.
Patterson's remains were discovered several hours later by members of a local tribe, alerted by the smell of the burning, the court was told.
Jabr's accomplice Mohamed Abdallah Hassan Abdul Aziz, who helped to burn the body, was previously sentenced to three years in jail.
The Briton's murder was one of two high-profile cases involving Western teachers in Qatar in recent years.
In 2012, Jennifer Brown, a newly-arrived US teacher from Pennsylvania, was murdered by a Kenyan security guard, Alvine Moseti Anyona, who is now serving life in prison.
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