Chief Justice Hossain said the prominent Jamaat leader would have to remain imprisoned “for the rest of his natural life”.
Sayedee had been given the death penalty for two counts of crimes against humanity on Feb 28, 2013 by the war crimes tribunal.
The Jamaat-e-Islami leader, known as 'Deilya Razakar' in 1971, was found guilty of crimes against humanity during the Liberation War.
ICT prosecutor Turin Afroz said they expected maximum punishment. "But we respect the court's verdict.”
"We are yet to get the full verdict. Once it's available we will understand where more facts and evidence were needed," she said.
Defence counsel Mizanul Islam said they did not agree with the verdict and that they expected acquittal.
Sayedee’s third son, Masood Sayedee, told bdnews24.com he had expected his father to be acquitted altogether.
“Although the death sentence has been reduced, I still think we deserve better. This was not justice.”
Sayedee’s son, who had attended the trial regularly day in and day out, said this trial had had its own share of scandals too. “We will certainly file a review petition after we get the full verdict.”
On Wednesday, the full bench of Appellate Division delivered the ruling on Sayedee's appeal against his death sentence.
Attorney General Mahbubey Alam, Additional Attorneys General Murad Reza and Md Mamtaz Uddin Fakir on behalf of the State and defence counsels Khandker Mahbub Hossain and SM Shahjahan were present.
Jamaat Number 2 Sayedee's trial began in the International Crimes Tribunal 1 on Oct 3, 2011 and the verdict was issued on Feb 28, 2013.
Of the 20 charges against him, Sayedee was given the death penalty for two – the murders of Ibrahim Kutti and Bisabali, and for setting fire to Hindu households in Pirojpur district in 1971.
The Supreme Court verdict sentenced Sayedee on five charges of the 20 that were framed against him.
The verdict reduced Sayedee’s death sentence for Ibrahim Kutti’s murder to imprisonment for 12 years.
In its second appeal verdict of a war crimes case, the Supreme Court sentenced Sayedee to prison until death for three charges.
These include the murder of Bisabali and arson in a Hindu neighbourhood, abduction and rape of three sisters of Gauranga Saha, who was a prosecution witness and identified Sayedee as the man who had handed over his sisters to the Pakistani Army to be taken away as sex slaves. They were returned after three days.
Sayedee was also sentenced to prison until death for forcible conversion of 100-150 Hindus.
Six other charges were also proven beyond doubt but no sentencing followed as he had already been given the death penalty.
Sayedee had, on Mar 28 last year, appealed against the death sentence, seeking acquittal.
The prosecution appealed for punishment for the six other proven charges for the sake of 'full justice'.
Appeal hearings concluded on Apr 16, when the court kept its verdict pending.
Security was beefed up across the country since Tuesday afternoon as soon as it was known that the Appellate Division would announce the verdict on Wednesday.
In the capital and elsewhere, security was ratcheted up and surveillance propped up from Tuesday around important establishments, government offices, petrol pumps and other key establishments.
The Supreme Court premises were also put under a tight security blanket. Archway-type metal detectors have been installed at the entry points.
Meanwhile, Ganajagaran Mancha activists once again gathered at Shahbagh on Tuesday evening and stayed there until midnight. They resumed their vigil from 8am Wednesday.
Law-enforcing agencies said security had been planned keeping in mind the massive violence unleashed by Jamaat supporters after Sayedee's verdict was given last year by the ICT-1 headed by Justice ATM Fazle Kabir.
In the days following that verdict, 35 people including policemen lost their lives in the violence. At least 200 others were injured and attacks were carried out on Hindus.
The 74-year-old Sayedee is in Gazipur's Kashimpur Jail. He has been in jail since June 29, 2009. The Jamaat leader was released on parole twice when his eldest son and his mother died.
The first verdict of the ICT was against Abul Kalam Azad alias Bachchu Razakar on Jan 21, 2013. No appeal was filed as Azad is absconding.
In the second verdict, Jamaat Assistant Secretary General Abdul Quader Molla was sentenced to life in jail on Feb 5 last year. After an appeal hearing the Supreme Court gave him death sentence on Sept 17 last year, which was executed on Dec 12.
Sayedee, whose trial began on Oct 3, 2011, was the first person to be prosecuted for war crimes while Molla's trial had begun in May, 2012.
In July, 2013, Jamaat Secretary General Ali Ahsan Mohammed Mujahid was sentenced to death by the ICT-2 while Jamaat guru Ghulam Azam was sentenced to 90 years in jail. Both of them filed appeals against the sentence.
Hearings on appeals filed by Ghulam Azam, Mujahid and BNP leader Salauddin Quader Chowdhury, who also got death for war crimes, are yet to begin.
On Tuesday, the appeal of former BNP minister Abdul Alim, also convicted of war crimes, was declared void as he had died in August.
On Feb 28 last year, the ICT-1 ordered Sayedee’s execution for his involvement in crimes against humanity during the 1971 Liberation War.
Throughout the trial and the appeal, the defence had tried to establish that war criminal Delwar and the accused Jamaat leader are not the same person.
Attorney General Alam had said on Apr 16, after the appeal hearing ended, “The defence has talked about Delwar Mallick-Shikder. They tried to get our witnesses talk on the issue during cross-examinations. But our witnesses have not said this anywhere."
Sayedee’s chief counsel Khandker Mahbub Hossain had said then, “The charges (brought against Sayedee) might be right. But Delwar Hossain Sayedee is not involved with these incidents. Delwar Sayedee has been charged instead of Delwar Shikder.”
The attorney general had then also said that the Supreme Court would not take into consideration the fact that Sayedee earned fame through his religious sermons while delivering the appeal's verdict.
Tribunal judge Fazle Kabir had also raised the same point when reading out the verdict.
"You know him (Sayedee). He is a prominent Maulana whose sermons draw huge crowds of believers,” said Justice Kabir. “He is also a Jamaat-e-Islami leader.”
“But we have come here not to hold trial of any Maulana or Jamaat leader. We are here to try the Sayedee who was known as Delu Razakar during 1971, a young man of 30,” he said.
Sayedee, at that time a youth of around 30 years of age, was known by the surname of Shikdar. He, however, became a member of the local Peace Committee, an infamous social platform mobilised centrally by right-wing political parties opposed to Bangladesh’s independence.