A negative verdict could have resulted in the PPP being disbanded, effectively nullifying the election results as a whole and pitching Thailand into political crisis.
On Thursday Surapong Suebwonglee, the PPP's secretary-general, said the party intended to formally announce a six-party coalition government on Saturday after a meeting to discuss policies and the make-up of the cabinet.
He said: "Our priority is to restore confidence of investors and create an atmosphere of stability."
Surapong said the name of Samak Sundaravej, the PPP leader, would be proposed for the prime minister's post.
Violations
Allegations of election violations arose after Thaksin Shinawatra, the deposed prime minister, was seen in PPP campaign videos despite being banned from Thai politics.
Al Jazeera's Selina Downes, reporting from Bangkok, said the PPP has been openly supporting Thaksin, taking over the old offices of his disbanded Thai Rak Thai party and using the same logo.
"Just about everything suggests it's Thai Rak Thai all over again," she said.
The Democrat Party, which is favoured by the Thai military and which came second in the polls, accused the PPP of being a front for the Thai Rak Thai party.
However, before the verdict came, Abhisit Vejjajiva, the Democrat's leader, said the court should not overturn the poll results.
"I don't think the election should be disqualified. The people did their job voting," he said on Thursday.