France sets limits on campaign spending, and prosecutors allege that the firm Bygmalion invoiced Sarkozy's party rather than the campaign, allowing the UMP to spend almost double the amount permitted.
After five years in power, Sarkozy was defeated by Socialist Francois Hollande when he ran for a second term in 2012. He has since faced a series of investigations into alleged corruption, fraud, favouritism and campaign-funding irregularities.
Sarkozy has denied charges of wrongdoing and has vowed to have all cases dismissed. His lawyer said he would challenge the latest decision in France's supreme Court of Appeal.
Under French law, a suspect is not formally charged with a crime unless he is sent to trial.
On Oct. 8, Sarkozy lost a first appeal against facing trial over separate influence peddling and corruption charges.
In that case, Sarkozy is suspected of helping a prosecutor get promoted in return for leaked information about a separate criminal inquiry.
Sarkozy lost presidential immunity from legal prosecution a month after he left office.