A Thai court has ruled that PM Somchai Wongsawat must step down over election fraud, a ruling he has accepted. Prime Minister Somchai Wongsawat said he accepted the ruling.
His governing People Power Party and two of its coalition partners have been ordered to disband and the parties' leaders have been barred from politics.
But it is unclear if the ruling ends a months-long political crisis, since other coalition MPs have vowed to form another government under a new name.
There are unconfirmed reports of a deal to open an airport closed by protests.
Anti-government protests at Bangkok's main Suvarnabhumi international airport, and the smaller Don Mueang airport, have stranded tens of thousands of travellers, bringing the country's important tourism industry to a standstill.
Agreement was reached to resume cargo flights from Suvarnabhumi on Tuesday, and a leader of the anti-government protesters was reported to say that passenger flights would be allowed as well.
Protesters angry at the decision demonstrate outside court, while those occupying the airports celebrate.
Officials said the airport would be closed to passenger flights until 15 December, reports the BBC's Quentin Somerville at Suvarnabhumi.
Both airports have been occupied by the anti-government People's Alliance for Democracy (PAD) since last week.
Just hours before the constitutional court's ruling, an anti-government protester was killed at Don Mueang airport, the country's domestic hub, in a grenade attack.
PAD supporters accuse Mr Somchai's administration of being corrupt and hostile to the much-revered monarchy, and want the entire government to resign.
They also accuse Mr Somchai of being a proxy for his brother-in-law, exiled former Prime Minister Thaksin Shinawatra.
Mr Somchai accepted the court's verdict, saying he was now "an ordinary citizen".
September 2006: Prime Minister Thaksin Shinawatra ousted in military coup
February 2008: Samak Sundaravej sworn in as prime minister
August 2008: PAD protesters occupy government buildings, demanding the government step down
September 2008: Mr Samak dismissed for violating conflict of interest law. Somchai Wongsawat, Thaksin's brother-in-law, becomes prime minister
October 2008: Thaksin given a two-year jail sentence for corruption in his absence
26 November 2008: Anti-government protesters take control of Bangkok's main airport
2 December 2008: Thai court rules that PM Somchai should be banned from politics, and his party should be dissolved
Thai crisis exposes class struggle
Extra planes for stranded Britons
Earlier on Tuesday, a protest by hundreds of red-shirted, pro-government supporters forced the constitutional court to move its final hearing to Bangkok's administrative courthouse.
After fewer than three hours in session, the head of the nine-judge panel, Chat Chonlaworn, announced that the court had found the People Power Party (PPP), the Machima Thipatai party and the Chart Thai party guilty of vote-buying, and unanimously agreed to disband them.
Dozens of the PPP's executive members, including Mr Somchai, were also found guilty of personal involvement and banned from politics for five years.
Judge Chat said that he hoped the ruling would "set a political standard".
Outside the court, where a large crowd of pro-government activists had gathered after learning of the relocation, there was a furious reaction.
Prime Minister Somchai's supporters accused the judges of sabotaging democracy and going against the people's will.
One former minister said members of the PPP who had escaped the political ban imposed on its leaders would regroup and form another coalition government.
"The verdict comes as no surprise to all of us," Jakrapob Penkair told the Reuters news agency. "But our members are determined to move on, and we will form a government again out of the majority that we believe we still have."
Other PPP members said they would seek a parliamentary vote for a new prime minister on 8 December.
Under the constitution, the disbanded parties are legally allowed to re-form under different names and form a new coalition, says the BBC's Jonathan Head in Bangkok.
The court's ruling will provoke anger throughout the heartland of the government's supporters in the North and North-east, says our correspondent.
The ruling may not appease the PAD, especially if the governing coalition reforms under a new leadership without fresh elections being held.
Thailand has been in political turmoil since former Prime Minister Thaksin Shinawatra was ousted in a military coup in 2006.
The PAD - a loose alliance of royalists, businessmen and the urban middle class - claims that the government is corrupt and hostile to the monarchy.
They also accuse it of being a proxy for Mr Thaksin, who remains very popular among Thailand's rural poor.
Fresh elections at the end of 2007 failed to resolve the crisis, when a party made up of former allies of Mr Thaksin returned to power.
Mr Somchai's predecessor as prime minister, Samak Sundaravej, was thrown out of office in September, after being found guilty of violating conflict of interest rules by appearing in a television cookery programme.
Protesters occupied a central government complex for more than three months, only leaving on Monday to join the demonstrations at the airports.
Shortly after the constitutional court's ruling on Tuesday, the government announced it was postponing a summit of the Association of South-East Asian Nations, due for mid-December, until March.