The three-judge ruling from the 6th U.S. Circuit Court of Appeals in Cincinnati denied a stay of deportation for the 89-year-old retired autoworker from his suburban Cleveland home.
"We are currently considering legal options including an appeal to the Supreme Court," his son, John Demjanjuk Jr., said in an e-mail to The Associated Press.
"Given the history of this case and no evidence of his personal involvement in even one assault, let alone a murder, this is inhuman even if a court says it is lawful," he said.
An arrest warrant in Munich alleges he was a guard in Nazi-occupied Poland in 1943. Demjanjuk says he was a prisoner of war, not a camp guard.
His family says he's too old and sick to be sent to Germany, but the government says he gets around for his age and says surveillance video proves that.
The appeals court said it believed the government would provide appropriate care for Demjanjuk while deporting him.
"Based on the medical information before the court and the government's representations about the conditions under which it will transport the petitioner, which include an aircraft equipped as a medical air ambulance and attendance by medical personnel, the court cannot find that the petitioner's removal to Germany is likely to cause irreparable harm sufficient to warrant a stay of removal," the court said.
The U.S. government will continue to seek the removal of Demjanjuk to Germany, Justice Department spokeswoman Laura Sweeney said Friday. She provided no information on when that might happen.
Immigration officials provided no indication on whether it would move to deport Demjanjuk promptly.
"He remains on an order of supervision with electronic monitoring supervised by U.S. Immigration and Customs Enforcement," spokeswoman Barbara Gonzalez told The Associated Press in an e-mail.
The family made it clear that it would fight the latest deportation threat.
A lawsuit was filed in Berlin "to stop the acceptance of my father as a deportee, Demjanjuk Jr. said Friday. The issue is whether Germany can accept him without having filed a formal request for extradition.
In the filing, provided to the AP, attorney Ulrich Busch argued that the government's approval of Demjanjuk's deportation is an "evasion of justice" because Germany has not filed a formal request for extradition.
Busch also asserts that German authorities have made no provisions for what would happen if Demjanjuk arrives in Germany but is acquitted or not brought to trial for medical reasons.
The administrative court in Berlin was closed Friday, a national holiday.
The Ukrainian native moved to this country in 1951 and became a U.S. citizen. But that citizenship was stripped 30 years later for lying about working in Nazi concentration camps, reports CBS News correspondent Cynthia Bowers. In 1986 he was deported to Israel, where he was sentenced to death for war crimes.
That conviction was stunningly overturned by the Israeli Supreme Court based on a misidentification of Demjanjuk and he was set free and returned to suburban Cleveland, reports Bowers. The new German arrest warrant was issued in March.
On April 14, immigration officers carried Demjanjuk in his wheelchair out of his home to deport him on a flight on an executive jet waiting on the tarmac. But within hours, the appeals court blocked the deportation while it reviewed his latest appeal.
As he was carried from his home, Demjanjuk had his head flung back, his mouth hung open and he moaned in apparent pain, infuriating relatives who said he had been promised a stretcher in consideration of his back pain.
The government responded by sending surveillance video to the court showing Demjanjuk walking unassisted to a doctor's office on April 6. The family said that Demjanjuk has good days and that the video didn't reflect his overall health situation.
Demjanjuk has said he suffers severe spinal, hip and leg pain and has a bone marrow disorder, kidney disease, anemia, kidney stones, arthritis, gout and spinal deterioration.