If she fails to pay the compensation, she will be sent to prison.
The court in Rome upheld the rulings of two lower courts, which had found Muti guilty of attempted fraud.
The drawn-out legal process is now at an end and the sentence definitive.
Muti had claimed that she had laryngitis and a high fever when she pulled out of the recital at the theatre in Pordenone, in the northern region of Friuli-Venezia Giulia. But her withdrawal at the last minute left organisers in the lurch, with many tickets already sold.
Photographs from the dinner in Russia showed her smiling and in apparent good health at a table with President Putin, prompting the theatre to take legal action.
The saga has dragged on for years. A local court found Muti guilty of attempted fraud four years ago.
In 2017, she appealed to a higher court in the city of Trieste, which upheld the conviction. She then made her second and final appeal to the supreme court in Rome, which agreed with the judgment handed down by the two other courts.
The actress is well disposed towards Moscow and last year said she would like to obtain Russian citizenship.
Her father was from Naples while her mother was Estonian.
She made her movie debut in 1970 in a film called La Moglie Più Bella or The Most Beautiful Wife.
She appeared as a princess in the 1980 film Flash Gordon and was in the 1991 movie Oscar, starring Sylvester Stallone.
She now has a month in which to pay the compensation or face the prospect of six months behind bars.
That may be a struggle. At the initial trial in 2015, she said she was not able to pay the €30,000.
Two years ago, she was evicted from her apartment in Rome after running up arrears of €80,000 (NZD$138,000) in her rent, Italian newspapers reported.
Born in Rome in 1955, Muti has three children from two marriages. She was voted The Most Beautiful Woman in the World in 1994 by readers of an Italian magazine, Class.
