Iraq's federal Supreme Court called the delay unconstitutional.
Parliament's acting speaker, Fouad Massoum, told The Associated Press that he expects to have a meeting date set by the end of this week.
The four-page court order termed as "illegal" a June decision by lawmakers to delay parliament's return and give leaders time to broker political alliances.
"The federal Supreme Court decided to cancel this decision, binding the parliament speaker to call on lawmakers to convene parliament and resume work," read the order that was issued Sunday.
The delay, it said, "violated the constitution."
Parliament's 325 lawmakers have met only once, briefly in June, since March 7 elections that failed to give any party a ruling majority. Since then, dueling political leaders have resisted returning as they try to corral alliances for enough support to name new government leaders, including the prime minister, when parliament reconvenes.
Without parliament in session, the government is in a holding pattern. It cannot move ahead with any major decisions, including business-friendly reforms such as streamlining bureaucracy and clarifying rules for foreign investment.
After meeting for just under 20 minutes in June, lawmakers agreed to leave the parliament session open but unattended - a technicality aimed at allowing negotiations for choosing leaders continue beyond constitutional deadlines. Under pressure from foreign allies and mounting exasperation from the Iraqi public, leaders since have twice tried - and failed - to bring parliament back.
The sides are sharply divided over the formation of a new government, and analysts and some lawmakers have warned that a decision could still be at least a month away. Prime Minister Nouri al-Maliki is battling to keep his job after the rival Sunni-backed Iraqiya list led by former prime minister Ayad Allawi narrowly won the most seats in the March vote.
Sunday's court order settles a lawsuit brought by independent watchdog groups against Massoum in his role as acting speaker. In a brief interview Sunday, Massoum said he has not yet seen the order but has no choice but to abide by the court's demands.
"I will call the leaders of the political blocs for a counselor's meeting, and expect to announce the date of the first session by the end of this week," Massoum said.
The political jockeying was taking place amid fears that Sunnis who supported Allawi, a secular Shiite, could turn to violence if they feel disenfranchised. Much of the violence that broke out after the 2003 U.S.-led invasion was fueled by retaliatory attacks between Sunnis embittered by the loss of the dominance they had enjoyed under Saddam Hussein and extremists from among the majority Shiites.
In the Sunni-dominated northern city of Mosul, police said a car bomb Sunday morning killed two passers-by and wounded 19.
The casualties were confirmed by a hospital worker who, like police, spoke on condition of anonymity because they were not authorized to brief the media.
Associated Press Writers Lara Jakes and Saad Abdul-Kadir in Baghdad and Yahya Barzanji in Sulaimaniyah contributed to this report.