'Null and void'
Imran Khan, Al Jazeera's correspondent in Islamabad, said: "In the last few minutes the amnesty has been declared null and void. That means the National Reconciliation Ordinance is no longer part of Pakistan's constitution, it's effectively illegal and this will force a political crisis within Pakistan.
"This allows corruption cases, that were quashed under the NRO, against Asif Ali Zardari to be open.
"As the President of Pakistan he is immune from prosecution but there will be a tremendous amount of pressure on him from the general public here to resign.
"We are also likely to see a new court case on whether Zardari was allowed to run for political office in the first place.
"In the midst of a massive crisis that Pakistan faces; a war within its own borders, suicide bombings on a deadly basis, we're now seeing a new political crisis."
The deal, which was announced two years ago by then-president Pervez Musharraf, allowed Zardari and Benazir Bhutto, his wife and a former prime minister, to return from self-exile without facing corruption charges.
But the NRO has been branded unconstitutional and the debate over its legitimacy has received a great deal of coverage in Pakistani media.
The amnesty covered more than 8,000 officials and civil rights activists argued that it was unjust to help so many politicians escape prosecution for alleged wrongdoing.
As president, Zardari, who has denied a slew of corruption claims against him, enjoys general immunity from prosecution.
But the supreme court could choose to challenge his eligibility for the post now that it has decided that the amnesty is illegal.
The debate comes as Pakistan's army battles Taliban fighters in its tribal regions.
The potential for a crisis to erupt from the supreme court ruling is a cause for concern in the US, whose administration wants Pakistan to remain focused on its campaign against the Taliban.