Tuesday's ruling also means Samak's Cabinet must resign, however, Samak's party spokesman Kuthep Saikrajang said party members had agreed to nominate the deposed leader in Parliament as their candidate for prime minister.
Kuthep said the party still needed the support of the ruling six-party coalition, and Samak himself, but their endorsement could render the court's ruling largely symbolic, placing Samak back in office in the near future.
The ruling came amid a deepening political crisis for Thailand.
Judge Chat Chonlaworn told the court that Samak had "violated Article 267 of the constitution" and that "his position as prime minister has ended."
Thailand's constitution bars government ministers from private employment while in office.
Anti-government protesters have occupied the grounds of Samak's office since Aug. 26, demanding his resignation. Protesters had pledged to end their sit-in at Thailand's Government House if Samak stepped down, but it was unclear if the court's ruling would satisfy them.
Thailand's Cabinet agreed on Sept. 4 to hold a referendum on a civic group's street campaign to oust Samak, which has paralyzed the government for weeks and raised fears of violence and economic chaos.
That decision came hours after a defiant Samak went on national radio and vowed he would not step down.
His combative speech last week intensified the deadlock with the People's Alliance for Democracy, whose supporters in their thousands have taken over the sprawling lawns of Samak's office compound since storming through the gates on Aug. 26.