The nation's top court has decided not to hear a last-ditch appeal to quash charges under Canada's Anti-Terrorism Act against Momin Khawaja.
The federal government, RCMP, and Canada's spy agency have been trying to bring the case against the Ottawa man to trial.
The Supreme Court justices gave no reason for their decision, as is standard in leave-to-appeal cases.
Khawaja's case is the first being heard under the new terrorism provisions of Canada's Criminal Code.
He faces seven charges under new laws which were introduced as part of the 2001 Anti-Terrorism Act, which was introduced after the Sept. 11, 2001 attacks on the United States.
The software developer is also named as a conspirator in the case of seven British Muslims accused of conspiring to detonate bombs in and around London in 2004, although he hasn't been charged in Britain.
Khawaja denies all the charges.
"What this means for Momin Khawaja is that he is currently undergoing a criminal trial in Ottawa, that trial will go ahead," CTV's Rosemary Thompson reported from Ottawa.
There had been speculation that if the Supreme Court stepped in, British authorities may have tried to extradite Khawaja, Thompson said.
"That will not happen now. He is facing these charges in Canada," she said.
Last October, a superior court judge struck down an "essential element" of Canada's legal definition of terrorism, saying it violates freedom of religion, thought and association guaranteed under the Charter of Rights.
Khawaja's lawyer, Lawrence Greenspon, has said the ruling strikes at the heart of the anti-terror law and should have resulted in the seven terrorism charges against Khawaja being thrown out.
Khawaja's trial is expected to proceed in Ottawa in May, but he has mounted other legal challenges, including whether evidence against him should be kept secret.
