Women's rights groups had urged the court to throw out the deal and Kinneret Barashi, a lawyer who represents one of the alleged victims in the case, described the ruling as a "black day" for the judicial system."
'Not a victory'
Katsav became Israel's first head of state to be convicted of sex offences and the second to be forced out of the office due to a scandal.
Katsav agreed under the deal to admit to having committed indecent acts against another woman who worked for him and to having sexually harassed another.
Under the arrangement with Mazuz, Katsav will not be imprisoned but will have to make a court appearance to enter his guilty plea.
He agreed to a suspended prison sentence and a fine of $11,000.
In its ruling, the supreme court said it saw no reason to interfere with Mazuz's decision.
Katsav, who portrayed himself in public as a victim of "incitement and persecution", resigned from the largely ceremonial post in June.
His attorney, Zion Amir, told reporters the former president, who has kept out of the public eye since his resignation, had suffered enough.
"This is not a victory. This is a sad day," Amir said. "After all, the former president went through a lot to reach this point. From the start, I think the petitions were unnecessary."