By Joyce Lee and Jihoon Lee

SEOUL (Reuters) - South Korea's Constitutional Court reinstated Prime Minister Han Duck-soo's powers on Monday, the latest twist in the country's recent turbulent politics after his impeachment as acting president nearly three months ago.

Han took over as acting leader from President Yoon Suk Yeol, who was himself impeached over his short-lived declaration of martial law in December. Following the ruling, Han returns to his acting president position immediately.

"I am grateful for the wise decision made by the Constitutional Court," Han said after the ruling, thanking members of the cabinet for their hard work while he was suspended.

"We will work together to prepare and implement responses to global changes, and to ensure that South Korea continues to develop well in the era of great geopolitical transformation," Han said in the televised comments.

Yoon's martial law declaration plunged Asia's fourth-largest economy and a key U.S. military ally into its greatest political crisis in decades, and sparked a leadership vacuum amid spiraling impeachments, resignations, and criminal indictments for a range of top officials.

Han had initially lasted less than two weeks in the post and was impeached and suspended on December 27 after clashing with the opposition-led parliament by refusing to appoint three more justices to the Constitutional Court.

The justices on the court ruled on Monday seven to one to strike down the impeachment.

Five of the eight justices said the impeachment motion was valid, but there were not enough grounds to impeach Han as he did not violate the constitution or the law, according to a court statement.

Two justices ruled that the impeachment motion against Han, who was acting president at the time, was invalid from the start as two-thirds of lawmakers in parliament did not pass it.

One justice voted to impeach Han.

Han, 75, had served in leadership positions for more than three decades under five presidents, both conservative and liberal.

In a country sharply divided by partisan rhetoric, Han had been seen as a rare example of an official whose varied career transcended party lines.

Still, the opposition-led parliament accused him of not doing enough to thwart Yoon's decision to declare martial law, an accusation he denied.

Finance Minister Choi Sang-mok assumed the position of acting president while the cases of Yoon and Han were considered by the Constitutional Court.

Parliament impeached Han over his alleged role in the martial law, as well as his refusal to appoint more justices to the Constitutional Court and back special counsel bills targeting Yoon and First Lady Kim Keon Hee.

Han attended the only hearing in the case on February 19, where he denied any role in the martial law episode and called for the court to dismiss the impeachment.

The unexpected imposition of martial law on December 3 by President Yoon and the ensuing political upheaval sent shockwaves through Asia's fourth-largest economy, and raised concern among from allies such as the United States under former President Joe Biden, who had seen Yoon as a key partner in efforts to counter China and North Korea.

The martial law in the end only lasted about six hours after lawmakers defied a security cordon around parliament and voted to reject the declaration.

The Constitutional Court's ruling on Yoon's impeachment is expected within days. Yoon also faces a separate criminal trial on charges of leading an insurrection by declaring martial law.

If Yoon is removed, a new presidential election will be held within 60 days.

(Reporting by Joyce Lee, Jack Kim and Jihoon Lee; Editing by Ed Davies and Stephen Coates)