Assange's legal team immediately issued its own statement, saying it will appeal to a higher court.
While the legal back-and-forth continues, Assange apparently will remain in the Ecuadorian Embassy in London, which granted him political asylum in June 2012.
He's wanted in Sweden on rape allegations, and the United Kingdom arrested him in 2010. He has said he's afraid that if he leaves the embassy, he could end up being extradited and facing the death penalty in the United States over allegations of revealing government secrets through his site, WikiLeaks.
The statement from Swedish prosecutor Marianne Ny said there's still probable cause against Assange on the rape charge as well as reason to believe he will flee to avoid prosecution. Prosecutors have asked Ecuador to let them question Assange at its embassy in London, Ny said.
"The public interest in the investigation continuing is still of high importance" the statement said.
The court in Stockholm also ruled that Assange, 44, should remain detained in absentia.
"The district court finds that the interest of enabling investigation of the crime JA is suspected of by way of questioning him outweighs the intrusion or harm the detention order causes JA. There are therefore grounds for JA to remain detained in absentia," the statement said.
Wednesday's ruling follows a February opinion from the U.N. Working Group on Arbitrary Detention, which said that the Swedish and UK governments have "arbitrarily detained
" Assange since 2010. Assange appeared on the embassy balcony to declare the opinion a "victory of historical importance" that was legally binding.
But Swedish prosecutors disagreed, saying Assange's stay in the embassy was not a form of detention.
Assange's legal team said, "In defiance of the U.N.'s order to release Mr. Assange
, Sweden's lowest court is keeping him detained. We are appealing and are confident Sweden's higher courts will finally put an end to this terrible injustice, which has seen Mr. Assange held without charge, for the last five and half years."
WikiLeaks rose to fame posting confidential items such as the U.S. military manual on handling prisoners at Guantanamo Bay
, Cuba, documents from the Church of Scientology, emails from Sarah Palin
and pager messages in New York from 9/11
. But the website gained worldwide attention in 2010 when it published hundreds of thousands of pages of classified documents related to U.S. wars in Afghanistan