An appeals court in Brazil has upheld a corruption conviction imposed on former president Luiz Inacio Lula da Silva.

The court also increased his sentence from nine to 12 years in prison for receiving a bribe from an engineering company vying for government contracts during his 2003-2010 presidency.

The decision could rule him out as a candidate for the presidential election next October.

The 72-year-old could now be ineligible to stand for election under Brazil's "Ficha Limpa" or "Clean Record" law, which bans political candidates whose convictions have been upheld by an appellate court.

However, after the ruling, he insisted that would still contest the presidency.

Lula can appeal the decision by the appeals court to Brazil's top appeals court or to the Supreme Court to delay a final ruling, possibly avoiding jail and stringing the process out long enough to register his candidacy by the 15 August deadline.

"Now I want to be a candidate for the presidency," Lula told thousands of supporters at a rally in Sao Paulo in the wake of the court verdict.

He stood atop a sound truck, blasting the ruling as a "lie" and strongly maintained his innocence. 

Lula said that if the three judges could "show me the crime I committed, I would give up trying to be a candidate".

"I want the judges to know that I am not worried like they think I should be," he said. "They cannot jail ideas or hope."