11:51 AM PT -- Special prosecutor, Dan Webb, tells TMZ ... "The appellate court ruled on every issue Mr. Smollett raised in our favor and against him. This was a resounding and profound victory for us today. Having a dissenting voice in the ruling is not uncommon. The decision by the appeals court is final."

He concluded, "What happens next is Mr. Smollett can file a petition for a higher appeal to The Illinois Supreme Court. This is purely discretionary meaning the court does not have to hear this appeal. He lost all legal rights to an appeal with today’s decision. If the Supreme Court decides to hear his appeal, there will be briefs filed and a hearing date set. If not, then the case goes back to the trial court, which will execute his sentence."

10:05 AM PT -- Jussie Smollett and his team aren't going to go down without a fight, a rep tells us, "We wish to highlight that the decision was divided, with Justice Lyle offering a detailed analysis in favor of Smollett. We are preparing to escalate this matter to the Supreme Court, armed with a substantial body of evidence."

Jussie Smollett just took a big L in court ... because his conviction for his hoax attack was just upheld.

An Illinois appeals court handed down the ruling Friday, with the three-judge panel voting 2-1 to uphold Jussie's conviction ... according to new legal docs obtained by TMZ.

The key to Jussie's appeal is the argument he could not be prosecuted because after the initial indictment, Cook County State Attorney Kim Foxx decided not to prosecute the case. That drew enormous criticism, and a special prosecutor was appointed who ultimately went to the grand jury that indicted him again.

The 2 justices who upheld the conviction said the decision not to move forward with the case was not equivalent to an agreement never to charge him. The 1 dissenting justice said Foxx's decision to not prosecute was in effect a promise to Jussie the case was over.

With the ruling, Jussie appears likely to return to a Chicago jail to complete his 150-day sentence.

Remember ... Jussie was initially convicted in 2022, spending 6 days in Cook County Jail before being released while trying to get his sentence overturned.

Now, Jussie's come up empty ... but his legal team has the option of appealing this decision to the Illinois Supreme Court, which would then decide on whether to hear the case.

During his appeal, Jussie dropped new music, directed a film with Vivica A. Fox, worked out with Taraji P. Henson, went to rehab and shaved his head.

It will be interesting to see if Jussie appeals again, or heads back to jail ... stay tuned.