In a written statement, the judges said it was not irrational for Immigration Minister Alex Hawke to deport Djokovic because of concerns that the unvaccinated Serbian star could pose a risk to public health and order.
The decision said it was open to the minister to deduce that Djokovic's presence could encourage anti-wax protests that could help spread Covid-19.
And they noted that the minister's decision also included the star's possible influence on people who were unsure whether to take the vaccine.
"The possible influence on the other group comes from common sense and human experience: An iconic world tennis star can influence people of all ages, young and old, but perhaps especially the young and the influential, to emulate him. This is not imaginative; it do not need evidence, "the verdict read.
The explanation concludes one of the most controversial episodes in Australian Opens history.
The world's No. 1 male player was forced to leave the country on the eve of the competition after the court could not find fault with the immigration minister's decision to cancel his visa.
It was the second time Djokovic's visa had been canceled - the first came hours after his arrival in Australia on January 5, when officers from the Australian Border Force (ABF) rejected his alleged exemption from rules stating that all new arrivals must be fully vaccinated.
The case went to court, and a single judge ruled that the decision was "unreasonable" because he did not have enough time to consult his lawyers. Djokovic was released from detention and resumed training at Melbourne Park in hopes of securing his 21st grand slam title.
Days later, however, the government intervened to cancel his visa again, saying the unvaccinated player was a threat to public health and order. The matter was referred to a higher court and the three judges met last Sunday.
Djokovic's legal team did not argue for the benefits of the minister's decision, only that he had committed a jurisdictional error under the country's migration law.
On Sunday, the judges ruled that there had been no error and Djokovic agreed to leave.
In a statement, the player said he was "disappointed" with the decision, but respected the court's decision. That night he left Melbourne on his way to Serbia, where he received a hero is welcome.
Serbian Prime Minister Ana Brnabic said Australia's treatment of the star was a "scandal". Brnabic told CNN on Wednesday that she did not know why Djokovic was not vaccinated, but added that she does not believe he is an anti-waxer.
"He supports vaccination of the people who want to be vaccinated. So I do not perceive him as anti-waxer," she said.
In a statement shortly after Sunday's ruling, Djokovic's family blamed the decision on politics.
"This is not just a sports issue and playing at the season's first grand slam, dominated by Novak for a decade now, but politics as well as all the interests that have prioritized over sports," the statement said.
Under Australian law, Djokovic could be expelled from the country for three years, although Home Secretary Karen Andrews has not ruled out an exception. "Any application will be reviewed on its merits," she said earlier this week.
On Tuesday, Tennis Australia expressed regret that the visa dispute had distracted the players of the tournament.
"We deeply regret the impact this has had on all players," the statement said. "There are always lessons to be learned and we will review all aspects of our preparation and implementation to inform our planning - as we do every year. That process always starts once the Australian Open champions have lifted their trophies."
The Grand Slam ends on January 31st.