The Australian government was thrown into turmoil on Friday after losing its one-seat majority with the disqualification of the deputy prime minister over his dual citizenship.
Barnaby Joyce was among seven politicians embroiled in a crisis after falling afoul of a previously obscure constitutional rule that bars dual citizens from sitting in parliament.
The high court ruled he was ineligible, meaning a by-election for his lower house seat of New England in New South Wales state will be held on December 2.
"The decision of the court today is clearly not the outcome we were hoping for but the business of government goes on," prime minister Malcolm Turnbull said in Canberra after the ruling was handed down.
Mr Joyce, the leader of the rural-based National Party, is Australian-born but found out in August he automatically acquired New Zealand citizenship through his father.
He told reporters in Tamworth, a city in his New England seat, that he was "always prepared for this outcome".
"I had no reason to believe that, you know, I was a citizen of any other country than Australia. That is the way it is ... Now I am going to make sure that I don't cry in my beer."
The 50-year-old has since renounced his New Zealand citizenship, allowing him to run in the by-election.
Independent MP Cathy McGowan said she would "continue to supply confidence and support to the government", giving the coalition room to breathe in the lower House of Representatives.
The deputy PM position is expected to be kept vacant ahead of the by-election, with foreign minister Julie Bishop tipped to take on the duties if Mr Turnbull travels overseas, according to local media.
Mr Turnbull said he would assume Joyce's agriculture portfolio.
If Mr Joyce loses the by-election, the coalition could keep ruling as a minority government if it receives the support of independent MPs on budget matters and on votes of no confidence.
Of the so-called "citizenship seven", only National Party senator Matt Canavan and independent senator Nick Xenophon were cleared for parliament.
The others, who are also upper house senators - the National's Fiona Nash, the Greens' Larissa Waters and Scott Ludlam and One Nation's Malcolm Roberts - were also ruled ineligible.
The dual citizenship rule was originally inserted into the 1901 constitution to ensure parliamentarians were loyal solely to Australia.
However, critics say it is out of step with the country's modern reality, where 50 per cent of the population are either foreign-born or the children of immigrants.
The government's solicitor-general had argued to the high court that Mr Joyce and four of the other seven had not breached Section 44 of the constitution as they were unaware of their overseas citizenship.
But in its judgment, the court ruled that "proof of a candidate's knowledge of his or her foreign citizenship status (or of facts that might put a candidate on inquiry as to the possibility that he or she is a foreign citizen) is not necessary to bring about the disqualifying operation".