Kirsha Kaechele, the artist behind the lounge, has said she will challenge the ruling by making the space "compliant" with regulations.
The lounge, which contains some of the museum's most-acclaimed works - from Picasso to Sidney Nolan - has been closed to the public since the court's order.
Ms Kaechele's plans involve transforming the velvet-clad lounge into a women's toilet and a church - which she claims will allow it to continue operating as a women-only space under legal exemptions.
“There is a fabulous toilet coming to the Ladies Lounge, and so in that sense the Ladies Lounge will operate as a ladies’ room.
"It’s a toilet that is celebrated the world round. It is the greatest toilet, and men won’t be allowed to see it," Ms Kaechele said in Australian media reports.
https://www.bbc.co.uk/news/articles/cd1wpegrnrxo
(I think there are existing threads about this, but couldn't resist the headline!)