Ruling signals green light for land confiscation
Zimbabwe's Justice Minister Patrick Chinamasa welcomed the decision and says the reforms will continue within a week.
He also denied that the ruling had been made by judges sympathetic to President Mugabe.
But the BBC's Southern Africa correspondent Barnaby Phillips says the manner in which the Zimbabwean Government has interfered with the judiciary means this is an extremely contentious decision.
But he says it is nevertheless a significant victory for the Zimbabwean Government.
It means that President Robert Mugabe can now argue that his land reform programme is legal, in compliance with international demands.
Unprecedented
The legal representative of the Commercial Farmers Union has described the decision as unprecedented.
Adrian du Bourbon told the BBC that the government now has a free-hand to do what it wants with thousands of farms
He said the ruling has left the impression the court does not recognise "that there is a break down of law and order" on white-owned farms.
Supporters of President Mugabe, the self-styled war-veterans, began their illegal and violent land invasions in February last year.
British money
Many black and white people who opposed the invasions have been intimidated, beaten up killed or have had their properties looted.
Last month, in an agreement with the British, at a Commonwealth ministers meeting in Abuja, Nigeria, the Zimbabwean Government promised not to violate the law, whilst redistributing white-owned land.
The British agreed to source finance for a legal and orderly land reform programme.
But in practice the government has ignored that ruling and violent invasions of farms continued.
Last year the government and its war veteran supporters put pressure on the country's Chief Justice and three judges to resign and replaced them with those widely seen as more sympathetic to Mr Mugabe.
The courts had consistently upheld the rights of white farmers in rulings which had caused considerable embarrassment to the government both at home and abroad.
But orders for the police to evict the invaders have rarely been obeyed.