Zuma and the National Prosecuting Authority had asked the court to overturn a Pretoria High Court judgment that the charges could be reinstated.
It's now probably clear that the NPA should immediately reinstate charges of fraud, racketeering and money laundering and corruption against Zuma.
The rand extended gains against the dollar after the Supreme Court's ruling, which was unanimous.
The case was scrapped a month before Zuma, 75, became president in 2009 after recorded phone calls indicated the investigator's actions may have been politically motivated.
Zuma's legal team made a concession during arguments at the SCA when they agreed that the decision to drop the charges was irrational.
Justice Leach, who only took eight minutes to hand down his ruling, said that manner in which the case was conducted on behalf of the NPA was inexcusable.
Both the NPA and Zuma turned to the SCA after the High Court denied them direct access for an appeal.
He said the picture that emerged was one in which Deputy National Director of Public Prosecutions Willie Hofmeyr and Mpshe were "straining to find justification" for discontinuing the prosecution. Zuma's counsel Kemp J Kemp SC hinted that their next move would be to approach the NPA to once again consider Zuma's representations.