Battisti's defense said it would appeal after judge Adverci Mendes de Abreu ruled that the former member of a violent far-left group should be expelled because he is "a foreigner in an irregular situation in Brazil who, as a criminal sentenced in his country for murder, does not have the right to stay."
The judge added that Battisti, 60, should either be deported to Mexico or France, having spent time in both countries before seeking refuge in Brazil in 2004.
She added her ruling did not contravene earlier findings by the supreme court or former president Luiz Inacio Lula da Silva that Battisti should not be expelled as "it is not necessary to hand him over to his country of origin."
Battisti was sentenced to life imprisonment in 1993 for involvement in four murders and complicity in others blamed on Pac, an armed Marxist group active in the late 1970s.
He says he is innocent and told AFP he had a "permanent visa as opposed to the status of a political refugee," adding his lawyer Igor Sant'Anna Tamasauskas had informed him of Tuesday's decision.
Tamasauskas told AFP his client would appeal, noting Brazil had previously ruled he could enjoy permanent residency.
Battisti spend three years from 2004 living clandestinely in Brazil before being arrested in Rio having spent some 30 years on the run in Mexico and France, where he turned his hand to writing detective stories.
After four years in Brazilian confinement, Battisti was released in 2011 and given permanent residency. The Brazilian supreme court had beforehand turned down an Italian extradition request after Lula had himself rejected the plea.
Italy recalled its ambassador in protest while Battisti adopted a low profile, moving to Sao Paulo and writing several books about his experiences.