The Supreme Constitutional Court (SCC) Judge Anwar Al-Aasy said that: "Article 3 of the Law 202 for the year 2014 which regulates the individual seats system for the house of representatives is unconstitutional".
The ruling referred to sections of the law on division of electoral districts.
After the court ruling, President Abdel Fattah al-Sisi called on the government to amend laws related to the March-April parliamentary poll within one month.
The spokesman for the Higher Electoral Commission (HEC) said, "Egypt's parliamentary elections are on hold until further review of a ruling on the unconstitutionality of a law defining voter constituencies."
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HEC spokesman Omar Marwan told reporters that HEC will convene an urgent meeting to discuss the consequences of the court verdict.
The SCC's verdict, according to Marwan, will be referred to the administrative court for legal review. The Constituency Division Law will then be referred to a committee to rewrite it.
Egypt has been without its main parliament chamber since 2012 when it was dissolved by a court ruling.
The elections are the final step of a transitional roadmap outlined by the military in July 2013 after the overthrow of President Mohammed Morsi.
Meanwhile, a judicial source said that administrative judiciary court will meet in March 10 to decide weather to postpone the elections or not.
The court also ordered the cabinet to pay 200 pounds as attorney fees.
Ex-parliamentary member Mustafa el-Gendi said that postponing the elections will have negative impact on the road map and the political scene.
Former army chief Abdul Fattah al-Sisi was elected president in May 2014.
Sisi approved a constituencies law in December creating 567 parliamentary seats, 420 of which would be contested by individual candidates, 120 allocated according to party lists and 27 assigned by the president.
The petitioners against the constitutionality of Law 202 have argued that it violates Article 106 of the constitution, which stipulates equality among constituencies in terms of population density and number of voters.