The rule was passed unanimously last fall by the New York City Board of Health, but was challenged in court by a preliminary injunction requested by the National Restaurant Association.
The ruling means that starting next week restaurants with more than 15 locations will have to use the so-called "sneaky salt" icon on menu items that contain 2,300 milligrams or more of sodium, which is the daily recommended limit.
The health department noted that the average New Yorker consumes 40 percent more than the recommended daily allowance.
The National Restaurant Association told ABC News they would appeal the decision, citing the need for a federal standard for menus.
"Today's decision by the court to uphold this arbitrary, onerous and costly mandate is a blow to small businesses owners -- the franchisees that own and operate New York's restaurants," an association spokeswoman told ABC News.
"The decision by the DoH to arbitrarily mandate warning labels for an essential nutrient, despite the fact that the information is available upon request under the federal guidelines is not only unnecessary, it undoes the very uniformity we worked for," the spokeswoman continued. "We will be exploring all of our legal options moving forward."