The Independent National Electoral Commission (INEC) removed Abubakar from the list of people standing as presidential candidates for the opposition Action Congress party, because he was indicted for fraud.
A lower court later ruled that INEC had no powers to disqualify candidates, and Tuesday's ruling was in response to an appeal by the electoral commission.
Abubakar has argued that the fraud indictment against him was politically motivated.
His supporters say that the panel of inquiry, set up by Olusegun Obasanjo, the Nigerian president, that found Abubakar had mishandled state funds, was unconstitutional and motivated by political concerns.
Obasanjo's lawyers deny this.
The INEC, whose members were appointed by Obasanjo, has already finished printing ballots for Nigeria's 61 million voters.
It has said it will ultimately follow any final legal judgment, but that reprinting voting papers may set back the date of the election, currently scheduled for April 21.
Abubakar and Obasanjo were elected together in 1999 and again in 2003. They fell out last year after Obasanjo's supporters tried to amend the constitution to allow Obasanjo a third mandate.
The electoral commission approved two dozen candidates for the vote, which is meant to set up the first transfer of power from one elected president to another in Nigeria's coup-ridden, 47-year history since independence from Britain.