The court of cassation "denied the appeal against the dissolution of Al-Wefaq and the seizure of its assets," the source said.
The decision comes three months after the Gulf kingdom's largest Shiite formation appealed a court order to dissolve it over charges of inciting violence, encouraging demonstrations and "harbouring terrorism".
The court ruling drew strong criticism from the United Nations as well as international human rights groups.
Al-Wefaq leader Sheikh Ali Salman has been behind bars since 2014 after being convicted of inciting hatred.
The Shiite Muslim group has called for Sunni-ruled Bahrain to become a constitutional monarchy.
The Shiite majority in Bahrain, which has been ruled by the Al-Khalifa dynasty for more than two centuries, has long complained of marginalisation and the country has been rocked by sporadic unrest since 2011.
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