Under the current law, doctors who perform terminations can be imprisoned for up to two years, while women face a maximum one-year sentence or a fine of up to US$1,500.
The nine-member panel ruled by seven to two that a 1953 law banning abortion was unconstitutional and gave Parliament until the end of 2020 to revise the law.
South Korea criminalizes abortions except in a few cases such as rape, incest, severe genetic disorders or when the mother's health is in danger.
"The abortion ban limits women’s rights to pursue their own destinies, and violates their rights to health by limiting their access to safe and timely procedures," the court said in a statement.
"Embryos completely depend on the mother’s body for their survival and development, so it cannot be concluded that they are separate, independent living beings entitled to the right to life," the Court continued.
A recent survey by the Korea Institute for Health and Social Affairs found that more than 75 percent of women aged 15 to 44 believed the law should be amended. In 2017, more than 230,000 people signed a petition to legalize abortion.
In 2010, the health and welfare ministry of South Korea estimated that about 169,000 illegal abortions were performed. But researchers estimate that illegal abortions could have reached 500,000 in 2016.
Roseann Rife, Amnesty International’s East Asia research director, said: "Today’s ruling is a major step forward for the human rights of women and girls in South Korea. The country’s draconian laws have resulted in discrimination and stigmatization for generations of women and girls by forcing them to undergo clandestine and unsafe abortions. The constitutional court has sent a clear message this must change, and, in future, the human rights of women and girls must be fully protected and respected."