Maria Elvira Pinto Exposto, 54, was found with 1.5kg of crystal methamphetamine at Kuala Lumpur Airport in 2014.
The court has previously heard Ms Exposto fell victim to an internet romance scam and that she was tricked into believing she was in Shanghai to lodge documents for her online boyfriend's retirement from service in the USA army.
Exposto, a mother of four, said she had no idea she was carrying the drugs.
She was initially found cleared of any wrongdoing but on Thursday an appeals court overturned the verdict and sentenced her to death.
Malaysia is amending laws that no longer bind judges to hand down mandatory death sentences for drug mules.
"Criminals will groom these individuals and they will talk to them morning, noon and night, and they develop a very close and trusting relationship", she said.
"Maria is a victim of an internet romance scam".
Exposto, from Sydney, said she did not know the drugs were there, and had voluntarily put the bag through the airport scanner during a stopover in Kuala Lumpur.
Late a year ago, she was found not guilty of drug trafficking by the Malaysian High Court.
Ms Exposto's lawyer Shafee Abdullah today told the court her client would exercise her right for a further appeal.
When she arrived at Kuala Lumpur International Airport to change flights, she mistakenly went through immigration as she was unfamiliar with the airport.
According to her lawyer, the charge has been reverted back to the original 39B drug trafficking charge which carries a mandatory death sentence.
She was acquitted after the judge found she was scammed by her online boyfriend and was unaware she was carrying the drugs.
Exposto maintains she did not know about the hidden stash of "ice".
Believing him to be a United States soldier based in Afghanistan, Exposto said the charming military man had "made [her] feel loved, he made [her] feel wanted", and would send photos of himself to the grandmother.
Shafee Abdullah now plans to make a final appeal to Malaysia's top court. Instead, she received two bags, which contained drugs stitched into the lining.
Malaysia, like other countries in Southeast Asia, imposes harsh penalties for drug offences.
Five people have been executed in Malaysia in recent years.