But the ruling, released early Friday, allows Leach to try to prove that the university's reasons for firing him were false.
The school in Lubbock fired Leach on Dec. 30, 2010, two days after suspending him amid allegations he mistreated a player with a concussion. Leach has denied mistreating the player.
The 7th Court of Appeals upheld Tech's sovereign immunity claim.
The ruling allows Leach to try to show Tech's reasons for firing him were wrong, but without monetary relief.
Leach's attorney plans to appeal the breach of contract claim to the Texas Supreme Court.
A Tech attorney did not immediately comment Friday.