Mohammed Mursi had issued the decree in defiance of a military council ruling that dissolved parliament.
Members of parliament gathered for a brief session earlier in the day before the ruling of the Supreme Constitutional Court was announced.
Hundreds have gathered in Cairo’s Tahrir Square to protest against the court’s latest decision.
Protesters chanted slogans calling the decision “illegitimate” and denouncing the military, reports say.
The same court sparked the current impasse last month, when it said the parliamentary election was null and void because of flaws in the law setting it up.
The Muslim Brotherhood party – Mohammed Mursi’s power base – has the biggest bloc of seats in the parliament, and the current political impasse is seen by analysts as being part of a power struggle between the Supreme Council of the Armed Forces (SCAF) and the party.
Members of parliament met for their brief session before it was adjourned by Speaker Saad al-Katatni.
Saad al-Katatni said that by holding the assembly, MPs were not contradicting the dissolution ruling “but looking at a mechanism for the implementation of the ruling of the respected court. There is no other agenda today”.
The MPs approved Saad al-Katatni’s proposal that the parliament seek legal advice from a high appeals court on how to implement the supreme court’s ruling on the election.
Some non-Islamist MPs boycotted the session, criticizing Mohammed Mursi for what they said was an attack on the judiciary.
The liberal Free Egyptians party said Mohammed Mursi’s “violation of the Supreme Court’s decision” represented a “challenge to the legitimacy of his own rule”, as the president had taken his oath of office in front of the court.
The SCAF said it was confident “all state institutions” would respect the law and constitution.
The dissolution of parliament took place the day before Mohammed Mursi was elected in Egypt’s first ever free presidential poll.
It is unclear how events will unfold as the situation – with the new president elected without a new constitution having been drafted – is unprecedented, analysts say.
At the same time as dissolving parliament, the SCAF also issued a constitutional declaration stripping the president of any authority over the military, giving itself legislative powers and the power to veto the as-yet-undrafted constitution.
The US House Ethics Committee has voted to release its report on former Republican Representative…
ABC News has agreed to pay $15 million to President-elect Donald Trump to settle a…
South Korea’s parliament has voted to impeach President Yoon Suk Yeol over his failed attempt…
Israeli war planes have carried out more than 100 air strikes in Syria on December…
President-elect Donald Trump has threatened to impose 100% tariffs on the BRICS countries if they…
Syrian troops have withdrawn from the city of Aleppo following an offensive by rebels opposed…