The News Corp company bought a 17.9% share of ITV in 2006. Observers suggest the investment a tactical move to head off a possible bid for the terrestrial broadcaster from Virgin Media in 2006.
But the Competition Commission ruled that the stake gave Sky an undue influence on ITV and reduced its independence.
Sky bought its stake for £960m and is set to make a substantial loss on a sale given current ITV share price, currently at 58.1 pence.
A Sky spokesman says: “BSkyB notes the decision by the Court of Appeal in relation to BSkyB’s shareholding in ITV. We will review the judgement and order carefully and consider next steps in due course.
Virgin Media filed its own appeal against the CC ruling, requesting Sky reduce its stake by a greater margin than the CC proposal.