A French court in Nice has upheld the ban on burkinis imposed by the mayor of Cannes.
The court said the ruling was legal but many religious groups were outraged.
The Collective Against Islamophobia in France (CCIF) said it would appeal against the decision in France's highest administrative court.
Authorities in Cannes and nearby villages voted to ban full-body swimsuits or burkinis from the end of July.
The court said the ban was legal under a law which prohibits people neglecting common rules on "relations between public authorities and private individuals" on the basis of religion.
The judge noted the ban came "in the context of the state of emergency and recent Islamist attacks, notably in Nice a month ago".
But CCIF lawyer Sefen Guez Guez, said he would lodge an appeal with the Council of State, the highest administrative body in France.
"This decision opens the door to a ban on all religious symbols in the public space," he added.
France is on high alert following a series of incidents including July's truck attack in nearby Nice.
Anyone caught breaking the new rule could face a fine of €38 (£33). They will first be asked to change into another swimming costume or leave the beach.
Nobody has been apprehended for wearing a burkini in Cannes since the edict came into force at the end of July.
This is not the first time that women's clothing has been restricted in France. In 2011 it became the first country in Europe to ban the full-face Islamic veil, known as the burka, as well as the partial face covering, the niqab.
Earlier this week a private waterpark near Marseille cancelled a burkini-only day after being subjected to criticism.