A former US Marine wanted by Washington over allegations he illegally trained Chinese pilots is set to be extradited, after losing a bid to remain in Australia.

Daniel Duggan, 57, was arrested in the regional city of Orange in New South Wales in October 2022 at the request of the US. They claim he broke US arms-trafficking laws by training Chinese fighter pilots in South Africa between 2010 and 2012.

Duggan, who denies the claims and is an Australian citizen, appealed the extradition but on Thursday, a Federal Court judge dismissed the case, paving the way for his removal.

Outside court, Duggan's wife said she was disappointed by the decision and called on the government to intervene.

Details in US court documents allege that Duggan did not ask for permission from the US government to provide military training to Chinese forces.

The father-of-six, who has renounced his US citizenship, faces up to 65 years in prison if found guilty of the charges against him.

Duggan's lawyer had earlier argued that Australia should oppose the extradition because it did not have an equivalent law covering the US charges, which is a requirement of extradition requests.

However, in 2024, the then-Attorney General Mark Dreyfus approved the extradition.

Duggan has 28 days to appeal the Federal Court decision, which also included an order to pay the government's costs.

Outside court, Saffrine Duggan said her husband - who is being held in a maximum security prison - is an ordinary Australian going about his business who broke no Australian law.

[It's been] 1,273 days of our family suffering terrible trauma since Dan was arrested in a supermarket car park after dropping our kids at school, Saffrine Duggan said, according to the Australian Broadcasting Corporation (ABC).

She added that the years-long case had cost the family about half a million dollars, and they had struggle to fund it after an injunction placed on the family's home meant they couldn't sell it, according to the Australian Associated Press.