The judge found that the election of current Prime Minister Avdullah Hoti by parliament on June 3 was illegal, local media reported.
Hoti was voted into his post by a razor-thin majority of 61 of 120 lawmakers.
The new court ruling states that Hoti’s election was not legal because one of the lawmakers who voted for him was not eligible to do so.
The politician had a fraud conviction at the time of the vote. At the end of September, he started his prison sentence.
The current president Vjosa Osmani will meet with party representatives on Tuesday to decide on a new election date, according to the media reports. The vote must take place within 40 days.
Hoti’s party had earlier terminated its coalition agreement with the left-wing Vetevendosje party under Prime Minister Albin Kurti in order to form a government with other partners and a leader from its own ranks.