A regional court ruled for the Dignitatis Humanae Institute think-tank, which Bannon backs, against a previous decision that blocked the school starting up in an 800-year-old monastery south of Rome.
"We stood by the monastery, the community and Italy during this pandemic when it would have been easy to walk way," Bannon said on Wednesday in a statement issued through the institute’s founder, Benjamin Harnwell, in response to the court's ruling on Tuesday.
Bannon, a Catholic, was helping to craft the curriculum for a leadership course aimed at right-wing Catholic activists at the Academy for the Judeo-Christian West in the town of Trisulti.
Many residents opposed the school and last year, Italy’s Culture Ministry, which owns the mountaintop property, withdrew a 19-year lease, citing violations of contractual obligations.
The institute appealed, saying the move was politically motivated.
Harnwell said he hoped to resume restoration plans and that registration would begin for an online program taught from the United States.
But while they still enjoy support from Italian right-wing politicians such as former interior minister Matteo Salvini, Bannon and Harnwell have lost key supporters within the Church.
Last year, American Cardinal Raymond Burke, who for years strongly backed Bannon and was a honorary president of the institute, yanked his support after Bannon said he wanted to make a film from a book alleging widespread homosexuality in Vatican.
Burke's withdrawal was a major setback for Bannon because the cardinal, one of Pope Francis’ fiercest critics, is a point of reference for Catholic conservatives worldwide.
Cardinal Renato Martino, an Italian, also stepped down as honorary president last year.