The Qatari official immediately announced he would challenge the decision at the Court of Arbitration for Sport.
FIFA said its three-man appeal panel met for seven hours before upholding a July ruling by its ethics committee to expel bin Hammam.
"The sanction of being banned from taking part in any kind of football-related activity (administrative, sports or any other) at national and international level for life has therefore been maintained," the governing body said in a statement.
Bin Hammam, who did not attend the hearing, will take on FIFA again at CAS, the highest court in sports.
"Mr. bin Hammam has already gone on record stating that he was not optimistic of justice prevailing from the FIFA appeals process but this was a protocol to enable him to obtain access to CAS," his American lawyer Eugene Gulland said in a statement.
Bin Hammam, a 15-year veteran of FIFA's ruling body, denies arranging to bribe Caribbean voters with US$40,000 cash payments in May to support his election challenge to Blatter. He later dropped out of the race three days before Blatter was re-elected unopposed.
Bin Hammam denies wrongdoing and has accused Blatter of orchestrating the bribery allegations to ensure the Swiss official would get a fourth and final four-year term in office.
Bin Hammam must go through FIFA's internal appeals system before taking his case to CAS in Lausanne.
FIFA is scheduled to provide bin Hammam's lawyers with the written grounds for its appeals ruling within several weeks, allowing him to file his next legal challenge.
"Let's hope FIFA does not draw the issue of this by a further month, like the previous motivated decision, as we are keen to present our case to an independent body," Gulland said.
Bin Hammam is preparing a second case at CAS, to challenge the appointment of Chinese official Zhang Jilong as his interim replacement as Asian Football Confederation president while he fights his ban.
Zhang will take bin Hammam's place as a FIFA executive committee member for the first time on Oct. 20-21, when Blatter will outline his promised anti-corruption project.
"These decisions infringe the Asian Football Confederation's constitution," Gulland said.
"We also continue to champion the need for transparency and call on FIFA to publish the transcripts of the appeals panel as well as that of the Ethics Committee proceedings in July."
FIFA said bin Hammam's appeal was judged by Francisco Acosta, the Ecuador Football Federation general secretary, Fernando Mitjans of Argentina and Augustin Senghor, president of the Senegalese federation.