UK hacker Gary McKinnon should be recommended for extradition to the US, a district judge has ruled.
The decision means Mr McKinnon will face trial in America for what the US has called "the biggest military hack of all time".
Although he has admitted hacking US military networks, Mr McKinnon said he was motivated by curiosity not malice.
The final decision on whether he should be sent to the US for trial rests with the home secretary.
The decision was given at Bow Street Magistrates' Court in London and ends three years of uncertainty for Mr McKinnon.
Speaking outside the court after hearing the decision Mr McKinnon said: "It went as expected and now the appeals process can now start."
Karen Todner, Mr McKinnon's solicitor, said: "We're obviously very disappointed with the judgement that was given this morning. We're proposing to appeal this to the Secretary of State, and if we're still refused we will then appeal to the High Court for a decision to allow Gary to be tried here as a British citizen."
Mr McKinnon was first arrested in 2002 by the UK's National Hi-Tech Crime Unit for hacking into a series of computer networks used by the US Army, Navy, Air Force, and Department of Defense.
The US in its case for extradition said Mr McKinnon caused more than $700,000 (£375,235) of damage while exploring the computer networks at various US military institutions.
It said one attack at the Earle Naval Weapons Station took place soon after September 11, 2001 made it impossible to use critical systems. The US Department of Justice said it took a month to get systems working in the aftermath of this attack.
Mr McKinnon has admitted that he spent almost two years exploring these networks but has said he was motivated by a search for what he called "suppressed technology".
In a recent BBC interview, Mr McKinnon said he had got close to getting pictorial evidence of technologies that could be of huge benefit to everyone but the US government was not releasing.
In numerous interviews about the case, Mr McKinnon has resisted attempts to portray him as a hacking mastermind. By contrast he said he was a "bumbling hacker" that exploited the lax security policies of the US military.
Speaking after the hearing ended, he said: "My intention was never to disrupt security. The fact that I logged on with no password showed there was no security to begin with."
Ms Todner said she was worried that any sentence Mr McKinnon received in the US would be "disproportionate" to the scale of the offences he committed.
"There is power under the Computer Misuse Act to charge him here and he could stand trial here," said Ms Todner. "In fact, had that happened he probably would have been tried, served his sentence and have been released by now"
If tried and found guilty in the US, Mr McKinnon could face decades in jail and fines totalling millions of dollars.