Three judges ruled that it was in the public interest to print a story containing allegations that Armstrong had taken performance-enhancing drugs. The cyclist has denied taking banned drugs.
Armstrong, who retired after winning his seventh consecutive Tour de France last Sunday, is suing the paper for printing a review of the book LA Confidentiel: Les Secrets de Lance Armstrong (LA Confidential, The Secrets of Lance Armstrong) - in June 2004. The article reprinted allegations that Armstrong had taken performance enhancing drugs.
The book, written by The Sunday Times sports writer David Walsh and Pierre Ballester, was published in France shortly before the 2004 Tour de France.
Lord Justice Brooke allowed The Sunday Times to use the defence of qualified privilege, meaning a publisher can argue it has a moral or social duty to publish. The court also allowed the paper to use several points to justify publication of the story.
Both defences were originally ruled out last December by the High Court judge Mr Justice Eady.
"Our client remains confident that this defence will fail and that he will receive the vindication from the court which he has been entitled to since the publication of these false and damaging allegations in June 2004," Armstrong's lawyer, Matthew Himsworth, said.
Lord Justice Brooke said that "fairness" demanded that the merits of the paper's assertion that it was under a duty to publish the article in the public interest should be properly investigated at a full hearing of the case and not struck out as the High Court judge had done.
The libel case will start in the High Court on 6 November and is expected to take three weeks.Reuse content