The federal high court had convicted Mengistu and 11 of his aides in December 2006 on 211 counts of genocide, homicide, illegal imprisonment and illegal property seizure.
Mengistu, 71, an army lieutenant colonel, ruled Ethiopia from 1974 as head of a Marxist government known as the Derg.
The genocide charges arose from a crackdown against opponents in 1977-78 known as the "Red Terror", in which more than a million people were tortured and killed by the Derg.
'A special guest'
Mengistu has lived in comfortable exile in Zimbabwe since he was removed from power in 1991.
After Mengistu's trial last year, Robert Mugabe, the president of Zimbabwe, ruled out his extradition, saying, "Comrade Mengistu still remains a special guest".
Mengistu was among 25 defendants tried in absentia.
Legesse Afsaw, known as "the butcher of Tigre", former Ethiopian vice-president Fisseha Desta and former prime minister Fikresellassie Wogderes were among those sentenced to death along with Mengistu.
A further 60 defendants were also found guilty of genocide, but only by a majority 2-1 ruling by the judges, who acquitted some on several lesser charges.
One defendant was acquitted of all charges.
Of the 73 accused, 14 have died and only 33 were present in court.
Harsher sentence
The court that passed life sentences in January 2007 accepted pleas for leniency from the defence, but Desta Gebru, the supreme court judge, rejected them on Monday.
The court instead followed the request of the prosecution to toughen the sentence imposed on Mengistu.
Gebru said: "The court has decided to revoke the leniency appeal from the defendants. It has sentenced them to death.
"They have tortured and executed thousands of innocent people in public, which applies as genocide according to Ethiopian law."