Appeals Court Justice Ignazio Ruvolo was critical of the measure, known as Proposition H, in the unanimous 3-0 decision. Ruvolo wrote for the court that "local governments are well advised to tread lightly" when regulating firearms.

The justice wrote further that the state laws were intended to balance the "interest of the general public to be protected from the criminal misuse of firearms" and the interest of "law-abiding citizens to purchase and use firearms to deter crime, to help police fight crime" and for hunting and recreation.

The court ruled in a lawsuit filed by the National Rifle Association, four firearms rights groups and seven individuals to challenge the ban. It upheld a similar ruling in which San Francisco Superior Court Judge James Warren found in 2006 that state laws pre-empted the local ban.

The measure, which never went into effect, would have barred almost all city residents from possessing handguns and prohibited all residents from selling, manufacturing or distributing the firearms within the city.

Exceptions would have been allowed for law enforcement officers and others such as security guards who need guns for professional purposes.

The measure was described to voters as being intended to address the serious problem of handgun violence in the city.

In her inaugural address Tuesday, San Francisco District Attorney Kamala Harris said getting guns off the city's streets was one of the main priorities of her second term.

"Over the last four years, 284 of the homicides in San Francisco -- nearly 80 percent -- were committed with a gun," Harris said. "So we are working with D.A.s around the country, drawing a line in the sand on the issue of illegal guns."

Harris' office has joined with other district attorneys to file "friend of the court" briefs to the U.S. Supreme Court as it considers the Second Amendment and what it means in terms of gun ownership.