The ruling means it's now up to Sweden's government to decide on whether to extradite the man, newspaper Aftonbladet reported, adding that he would be the first PKK-supporter extradited by Sweden to Turkey.
In Sweden, the government makes the final decision on extradition request but cannot grant a request to another state if the Supreme Court rules against it.
According to Aftonbladet, the court reached the decision last week and comes just as the two countries are due to discuss Sweden's stalled NATO application after the re-election of Turkey's President Recep Tayyip Erdogan.
The 35-year-old man was sentenced in 2014 to four years and seven months in a Turkish prison for transporting a bag containing cannabis, the newspaper said.
He was released on parole and moved to Sweden but was arrested in August last year following a request from Turkish prosecutors who want him to serve the rest of his sentence.
But the newspaper said the man claims the real reason he is being sought by Turkish authorities is his affiliation with the pro-Kurdish Peoples' Democratic Party (HDP) and for having shown support for the PKK or Kurdistan Workers' Party, a group blacklisted by Ankara.
In the decision, according to Aftonbladet, the court noted that it had asked the Turkish prosecutor if there were ongoing investigations or charges against the man regarding "propagating for terrorist organisation" or "insulting the Turkish president", which the prosecutor denied.
Turkey and Hungary are the only NATO member states yet to ratify the Sweden's bid -- which requires unanimous ratification.
Erdogan has so far blocked Sweden, accusing Stockholm of being a haven for "terrorists," especially members of the PKK.
Cracking down on extremist groups and approving the extraditions dozens of suspects it believes are linked to a failed 2016 coup attempt and a decades-long Kurdish fight for an independent state have been key demands from Turkey.
Ending two centuries of neutrality and military non-alignment, Sweden and neighbouring Finland announced bids to join NATO in May 2022, in the wake of Russia's invasion of Ukraine.
While Sweden's bid still faces opposition, Finland managed to become the 31st member of NATO on April 4.
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