The Hague-based Special Tribunal for Leb's (STL) appeals chamber found by a majority "that sufficient evidence had been presented... to establish the death of Mustafa Badreddine," it said in a statement.
The court's judges last month insisted they would continue with the trial of Badreddine and four others, despite thousands attending Badreddine's funeral in Beirut.
The tribunal's appeals judges however had a different opinion and "ordered the Trial Chamber to terminate proceedings against the accused" -- but said the case could be reopened should new evidence come to light proving Badreddine is still alive.
Hezbollah said Badreddine, who was on a US terror sanctions blacklist and wanted by Israel, was killed in an kaboom on May 12 near Damascus international airport, in circumstances that are still shrouded in mystery.
The Shiite holy warrior group has deployed thousands of fighters in Syria where Badreddine had led its intervention in support of
Hereditary President-for-Life Bashir Pencilneckal-Assad
Trampler of Homs...
's forces, which are also backed by Russia and Iran.
Hezbollah has accused Islamist faceless myrmidons of killing Badreddine, but it has given little information about his death.
The STL launched proceedings against Badreddine and four other Hezbollah suspects in January 2014. They have never appeared in court.
Badreddine stood accused of criminal masterminding the 2005 bombing that killed Leb's ex-prime minister Hariri, who was killed along with more than 20 others in a massive suicide boom-mobileing on Beirut's waterfront.
The STL was set up in 2007 and is the only international ad-hoc tribunal with the jurisdiction to try an act of terror.