The three judges also rejected a request to stay their decision to give the parents time to appeal to the Supreme Court of Canada.
Justice Keith Ritter, who read the unanimous decision, said the sanctity of life is a core value in society, "but human life must end."
The child could be taken off life-support in the next couple of days, giving enough time for the parents to visit her.
Each parent will get a chance to visit the girl at her hospital bed for 20 minutes within the next 24 hours.
The visits must be done separately and under police guard.
Kept alive by ventilator, feeding tube
The two-year-old, who can be only be identified by her first initial, "M," is being kept alive by a ventilator and a feeding tube.
"For those those who say the merciful thing is to let 'M' die, I would like to remind everyone that we don't condone euthanasia in Canada," Lydia Bubel, the lawyer for the child's father, argued before the court earlier in the morning.
She argued that giving the courts the power to decide over the child's life would "take sanctity of life away from families and ... put it in the court's hands."
"This case is horrible," she told Justices Keith Ritter, Frans Slatter and Myra Bielby. "It's horrible any way that you look at it."
Parents charged with assault, negligence
Since the child's parents were arrested in May, they have been in jail on charges of aggravated assault, criminal negligence causing bodily harm and failing to provide the necessities of life.
They have been barred from speaking with each other or visiting the hospital, and they argue that has limited their ability to discuss their daughter's care.
Last week, a Court of Queen's Bench judge ruled the parents' desire to keep M alive out of love or religious beliefs is not necessarily in the child's best interest.
The judge also noted that if the child is removed from life-support and dies, the couple could be charged with her death.
Justice June Ross sided with doctors, who told the court that the girl's brain damage is so severe that she will never regain consciousness.
Case could have wide-ranging effects
Tim Caulfield, an expert in health-care law with the University of Alberta, says he wasn’t surprised that the ruling was upheld.
“I think the court of appeal came to a logical conclusion to this sad tale,” he said.
Caulfield says the case could have wide-ranging effects on future cases. It shows that the court has jurisdiction to step into similar matters, and sets the precedent that taking someone off life-support can be in their best interest.
He also thinks the case could clarify the law when religious beliefs conflict with medical advice.
The parents had previously argued that taking the girl off life-support was against their religious beliefs.
“I think the judge handled the religious aspect carefully, noting that it can be a factor and something that should be considered,” Caulfield said.
“But not in a case like this when you’re talking about an infant that hasn’t adopted a religion yet and hasn’t adopted a culture.”