Bainimarama originally became prime minister after forcing out Laisenia Qarase in a bloodless military coup in December 2006.
After declaring the coup illegal, the court ordered that Iloilo appoint a distinguished person to act as caretaker prime minister, but said that person should neither be Bainimarama nor Qarase, who had brought the case.
Bainimarama's administration has previously resisted international pressure, led by Australia and New Zealand, to restore democracy following the coup and hold elections this year under the existing constitution.
On Friday, Iloilo set September 2014 as a deadline for parliamentary elections.
The 16-nation Pacific Islands Forum has threatened to suspend Fiji's membership unless it names an election date by the beginning of next month.
The Commonwealth has threatened similar action by no later than September if sufficient progress is not made towards restoring democracy.
Despite the political upheavals in Fiji over the last few days, the country has remained relatively calm with the police and military handed sweeping powers to maintain order.
Ban Ki-moon, the UN secretary-general, condemned Iloilo's decision to abolish the constitution.
"The secretary-general has learned with deep dismay of the abrogation of the constitution of Fiji, dismissal of the judiciary, declaration of public emergency and a clear attempt to prolong rule by an unelected executive," Michele Montas, his spokeswoman, said in a statement.
"The latest measures are a clear rejection of the legal process and are contrary to the stated common objective of returning the country to an elected government as soon as possible."