Lagarde, who was French finance minister at the time of the deal in favor of tycoon Bernard Tapie, is accused of negligence in the case. She has denied wrongdoing.

A special court ruled in December that Lagarde should stand trial, but she appealed. France's Court of Cassation on Friday rejected the appeal.

Lagarde lawyer Patrick Maisonneuve expressed disappointment at the decision, but told The Associated Press that he expects the trial to show that the IMF chief did nothing wrong.

The unusually generous 2008 arbitration deal, paid from public funds, prompted years of legal disputes that remain unresolved.