The Islamic school in Birmingham, England, by an appeals court in London, is found to be breaking the law when separating boys and girls.
The Al-Hijrah School - which funded its operations derived from the state budget - declared sex discrimination and therefore violated the Equity Act.
The case was filed by Ofsted, the institution responsible for educational standards in the UK. Ofsted took the Al-Hijrah case to the appeals court after a high court declared no violation of the law by Al-Hijrah.
The Al-Hijrah School separates female and male students both during the teaching and learning process, during the breaks, as well as during out-of-school education activities.
This rule applies to the fifth grade, when students in this class are nine years old.
Director Ofsted, Amanda Spielman, said, by sex-segregation "the school does not apply social relations properly and at the same time does not prepare learners to live modern life in the UK".
He also said educational institutions should not treat different students according to gender.
The lawyer representing the Al-Hijrah board, Peter Oldham, said that although separated, girls and boys were treated equally.
The judges in the appeals court said the separation of male and female students did not happen only in Islamic schools.
According to the judge, the separation of pupils was also found in Christian and Jewish schools.
It is estimated that there are 20 schools in the UK that implement separation policies between boys and girls.
