  We derive an exact expression for the partition function of the Euclidean BTZ
black hole. Using this, we show that for a black hole with large horizon area,
the correction to the Bekenstein-Hawking entropy is $-3/2 log(Area)$, in
agreement with that for the Schwarzschild black hole obtained in the canonical
gravity formalism and also in a Lorentzian computation of BTZ black hole
entropy. We find that the right expression for the logarithmic correction in
the context of the BTZ black hole comes from the modular invariance associated
with the toral boundary of the black hole.
