A former US Marine wanted by Washington over allegations he illegally trained Chinese pilots is set to be extradited, after losing a bid to remain in Australia.

Daniel Duggan, 57, was arrested in the regional city of Orange in New South Wales in October 2022 at the request of the US. They claim he broke US arms-trafficking laws by training Chinese fighter pilots in South Africa between 2010 and 2012.

Duggan, who denies the claims and is an Australian citizen, appealed the extradition but on Thursday, a Federal Court judge dismissed the case, paving the way for his removal.

Outside court, Duggan's wife said she was disappointed by the decision and called on the government to intervene.

Details in US court documents allege that Duggan did not ask for permission from the US government to provide military training to Chinese forces.