He then demanded a large cash payment to stay silent or the images would be sent to the Los Angeles Times and People magazine.
As part of his sentence, three release conditions were also imposed on Green by District Court Judge Claire Ryan.
They included GPS monitoring, an employment condition prohibiting Green from any work or training without the prior written approval of a probation officer, and an internet ban.
Green was told that upon his release from prison he would be prohibited from freely entering any internet cafe, public library or place of similar business where he could gain access to internet-capable devices.
He appealed the conditions to the High Court unsuccessfully in September before seeking leave for a second appeal to New Zealand's second highest court.
Green represented himself in his application to the Court of Appeal and argued the District and High Court judges did not promote rehabilitation and reintegration.
He also said the Department of Corrections was "abusing its own rules and regulations and denying me my civil and legal rights".
On Friday, the Court of Appeal released its ruling - denying Green a second challenge.
"As to the second proposed appeal ground, Mr Green submits that the conditions are being imposed in a harsh and unfair manner. This does not provide any basis, however, to challenge the existence of the conditions themselves and we find in all the circumstances here that they are reasonable," the court's judgment reads.
As part of Green's attempted blackmail, he bombarded the wealthy LA businessman over six days with 24 text messages and two voicemails - changing his phone when the first was blocked.
Green also threatened to disclose the affair images to the businessman's wife, daughter and others - prompting the LA man to arrange for security at his home.
The businessman further received a handwritten letter from Green in late March last year, which was accompanied by photographs of people, screenshots and advertisements.
In the letter, Green again said he would leak photographs and information to the Los Angeles Times and People magazine if the businessman continued his refusal to pay.
As a result of the ordeal, the businessman and his family suffered "very considerable and long-lasting anxiety", court documents read.
Green's criminal history includes some 198 previous convictions for assault, wilful damage, intimidation, speaking threateningly, assaulting police and resisting police.
He also has convictions for dishonesty offending, forgery, altering a cheque and fraudulent use of a document.
Further convictions include misusing a telephone and using a telephone offensively, sending a threatening letter, making a false claim of fire, impersonating police, making a false statement, giving a false oath, perverting the course of justice, and engaging in criminal harassment.
He also has 35 convictions for breaching the terms of a protection order.
