Sharif resigned in July after the high court disqualified him from office over corruption issues.
Friday's ruling came after a 15-month investigation into his family's wealth after Sharif's children were linked to offshore banking companies in the 2015 release of confidential data known as the Panama Papers.
Although Sharif has consistently denied any wrongdoing in the case, a panel of five judges reached a unanimous verdict in the Islamabad court.
Shahid Khaqan Abbasi was elected by Pakistan Muslim League-Nawaz to take Sharif's place.
The unanimous vote by a five-judge panel cites an article in Pakistan's constitution that requires members of parliament to be "honest and righteous."
Sharif's supporters consider the ruling a ploy to weaken the popular ruling party, which is favored to win upcoming elections.
Marriyum Aurangzeb, the minister of information, denounced the verdict.
"Not a single rupee of corruption was proved," she said, while outside the court on Friday.
Legal experts say if Sharif's party secures a landslide victory in the next elections, expected this summer, he could re-enter national politics if the party amends the constitution to remove disqualification clauses.