Coles will not be able to label bread baked overseas and frozen "fresh" for three years.
Supermarket chain Coles has been banned for three years from advertising that its bread was made or baked on the day it was sold.
Coles was also ordered to display a Federal Court notice in its stores and on its website telling shoppers that it had broken Australian consumer law by falsely advertising bread products as "freshly baked" and "baked today".
The Australian Competition and Consumer Commission launched proceedings against Coles in June 2013, accusing the supermarket giant of misleading consumers to think bread was made on the day at the store when, in some cases, the bread had been partially baked months earlier in overseas factories.
The ACCC investigation was triggered by former Victorian premier Jeff Kennett complained when he discovered a loaf of Coles bread that was advertised as freshly baked in-store had been made in Ireland.
In June 2014, the supermarket chain was declared guilty by the Federal Court of misleading shoppers. Federal Court chief justice James Allsop said at the time that Coles had breached three sections of Australian Consumer Law, in his ruling, handed down on Wednesday.
Federal Court judge James Allsop handed down a ruling on Monday that banned Coles from promoting its bread as baked on the day it is being sold or made from fresh dough for three years.
It must tell consumers of the ban and that it had been found to have made the false, misleading and deceptive representations by advertising bread as fresh when it had been made and partially baked and then frozen, sometimes months earlier overseas.
The offending breads were sold under the brands 'Cuisine Royale' and 'Coles Bakery', with labelling and advertising claims that they were "Baked Today, Sold Today" and/or "Freshly Baked In-Store".
ACCC investigators said the goods had in fact been made months earlier on the other side of the world, namely, Denmark, Germany and Ireland, before being frozen and transported to Australia.
The court is yet to make a decision on whether to fine Coles, which faces penalties of more than $3 million.
Fairfax Media staff reporters with AAP