The Freedom Party candidate, Norbert Hofer, lost the election to the former leader of the Greens, Alexander Van der Bellen, by less than a percentage point.
The election will now be re-run.
Announcing the decision, Gerhard Holzinger, head of the Constitutional Court, said: "The challenge brought by Freedom Party leader Heinz-Christian Strache against the 22 May election...has been upheld."
If elected, Mr Hofer will become the first far-right head of state of an EU country.
His party has based its election campaigns around concern over immigration and falling living standards for the less well-off. Following the court's order to re-run the vote, President Heinz Fischer will be replaced on a temporary basis by three parliamentary officials, including Mr Hofer.
The new election is expected to be held in September or October."
map from BBC
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