The ruling sparked protests from hundreds of her supporters, two of whom were killed in clashes with police outside the court.
It marks the first time a South Korean president has been ousted before the end of their term since democracy replaced dictatorship in the late 1980s.
Park's action had "seriously impaired the spirit of ... democracy and the rule of law," said constitutional court chief justice Lee Jung-Mi. "President Park Geun-hye ... has been dismissed."
Election law now requires a snap poll to be held within 60 days.
In anticipation of the ruling, Park supporters, many of them dressed in army-style fatigues and wearing red berets, and those who want Park gone began showing up around the Constitutional Court building in downtown Seoul.
A big television screen was set up near the court so that people could watch the verdict live. Hundreds of police also began preparing for the protests, putting on helmets with visors and black, hard plastic breastplates and shin guards.
Park, 65, has been accused of colluding with a friend, Choi Soon-sil, and a former presidential aide, both of whom have been on trial, to pressure big businesses to donate to two foundations set up to back her policy initiatives.