The High Court knocked back Mr Latham's special leave to appeal against a decision of the Full Court of the Federal Court.
"The matter is not an appropriate vehicle to decide the issues of law in the special leave questions," the judgement on Thursday read.
The High Court said the legal matter "has insufficient prospects of success to warrant a grant of special leave."
The rejection comes after the Federal Court in April 2025 found the right-wing independent MP had defamed Sydney MP Alex Greenwich in an explicit tweet during the 2023 state election.
The tweet - which graphically described a sex act - responded to a news article in which Mr Greenwich described Latham as a "disgusting human being".
Mr Greenwich said in a statement that he was "relieved and grateful" by the court's decision on Thursday.
"I took this legal action not only to stand up for myself and protect my reputation, but also to stand up for the LGBTQ community and help lift the standards of public discourse in my profession," he said.
"No one should have to endure the kind of abuse I experienced, particularly from someone holding public office."
He said it ends a bitter legal stoush that has been ongoing for more than three years.
"Today's High Court decision reinforces that there are consequences for hateful and defamatory conduct, and that there is no place for homophobic abuse in Australian political discourse."
The Federal Court found the post had exposed Mr Greenwich, who is gay and a vocal LGBTQI advocate, to hatred and ridicule.
Mr Latham, a former federal Labor leader turned renegade MP in NSW parliament, was also ordered in 2025 to pay Mr Greenwich's legal costs which is expected to come in at more than $500,000.
The former NSW One Nation leader sought to quash the court's ruling, claiming that calling someone gay or saying gay men have sex was not defamatory.
But three Federal Court appeal judges in June said most people would not interpret Mr Latham's tweet as saying that.
The High Court also ordered he pay costs in his special leave application.
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