A former Nazi Schutzstaffel (SS) guard, known as the "Bookkeeper of Auschwitz", is fit to serve his sentence, said German public prosecutors.
Oskar Gröning, 96, was found guilty of being an accessory to the murders of 300,000 people at the camp and sentenced to four years in prison in July 2015 by a court in Lüneberg, Germany.
But Gröning has been living at home despite his conviction, due to his age and medical complications. It was unclear if he would serve a day in jail.
However, a court doctor has now determined that he is able to serve his sentence, if he is given appropriate nursing care while in detention.
"The prosecutor has rejected the application from the defence for a sentence suspension," a court spokeswoman told Agence France-Presse earlier this week.
Gröning worked as an accountant at Auschwitz, sorting and counting the money taken from those killed or used as slave labour, and shipping it back to Nazi superiors in Berlin.
At his trial two years ago over 50 Auschwitz survivors acted as co-plaintiffs or witnesses at the hearing.
Survivor Eva Pusztai Fahidi said: "Sins must be judged and what was done in Auschwitz-Birkenau was a sin. It must be judged. It was a crime that will stay for eternity.
"God himself in comparison with an SS man is nothing. What do I expect from him? I expect that he understand what it means that he was there. Even if he had done nothing, but had only stood there by the ramp as my family arrived.
"I have 49 names that I can count. 49 names from my family who marched past as he stood there beside that ramp."
The case was the first in Germany to test a new legal precedent set in 2011 through the trial of John Demjanjuk, who was a death camp guard at Sobibor, in northern Poland.
Prosecutors argued in Demajanjuk's case that he was culpable of a crime because of the fact that he had worked at the camp, rather than due to evidence of his involvement in specific deaths.
One million European Jews died between 1940 and 1945 at Auschwitz in southern Poland, which was more than British and American losses of World War Two combined.
Another 100,000 also died at the camp including Polish political prisoners, Soviet prisoners of war, Gypsy families, homosexuals and people with disabilities.