The state-run Anadolu Agency's live Twitter account announced the new election will take place on June 23.
Although the decision means İmamoğlu will be stripped of his mayoral mandate until the re-run of the election, he appeared confident, calling on citizens to remain calm and hopeful.
İmamoğlu's demeanour was a stark contrast to that of Binali Yıldırım, his rival from the ruling Justice and Development Party (AKP), who was able to summon up little enthusiasm despite having been given another chance to win the mayor's seat in Turkey's largest city.
The YSK met on Monday to discuss an appeal launched by Turkey’s ruling Justice and Development Party (AKP), which has said the opposition candidate’s victory in Istanbul came after electoral fraud and other irregularities.
Reports state that seven YSK board members voted to cancel the election result and four voted against.
Local press reported that the YSK's decision to cancel the election means İmamoğlu, will be stripped of his mayor's mandate until elections are held again and replaced by an interim mayor chosen by the interior ministry.
İmamoğlu condemned the YSK's decision in a speech after the board released a written statement on Monday evening. The CHP candidate said the electoral board had bowed to pressure from the ruling party.
The loss of Istanbul, Turkey's most populous city and the country's financial powerhouse, was seen as a stunning blow for President Recep Tayyip Erdoğan, who came to prominence after becoming the city's mayor in 1994.
Erdoğan spoke in support of the AKP's appeal on Saturday, when he told Turkish businessmen in Ankara the election should be held again due to the "clear irregularities" he said had taken place on March 31.
The appeal was launched after the ruling party’s demands for recounts of invalid votes across the city failed to overturn the slim lead secured by İmamoğlu.
The AKP then lodged its appeal to cancel its elections, presenting the YSK with claims that 40,000 votes had been cast by people not eligible to take part in the election, and officials who had overseen polling stations did not meet a legal criteria of being public officials.
The CHP responded to the allegations by presenting election records showing that the number of ineligible voters who had participated in the election was in fact lower than 1,000.
Anadolu Agency reported that the elections will be re-run since presiding officers and other officials at polling stations who were not public officials took part in the elections in contravention of a "clear legal requirement".
Analysts have pointed out that the officials were authorised almost a month before the elections by the YSK, and that previous elections have stood despite the participation of polling station officials who were not public servants.
A written statement shared by the YSK said legal action would be launched against electoral officials who authorised the non-public workers.
The CHP candidate took aim at the YSK for its decision during his speech, slamming the board for cancelling an election the ruling party had lost but not the presidential election in 2018 and the constitutional referendum the previous year despite the same electoral boards participating in both elections.
İmamoğlu finally received his mandate on April 17, weeks after the local elections took place on March 31. However, the YSK’s decision means he will face his AKP rival, former prime minister Binali Yıldırım, once again.
Amid the intense speculation on Monday evening, the CHP mayor recorded a relaxed statement shortly after the YSK's decision was announced, saying he would wait for an official statement from the YSK before discussing the decision.
İmamoğlu later announced in a tweet he would meet voters to discuss the YSK's decision at a park in his home district of Beylikdüzü. Images shared on social media showed large crowds gathered in the Valley of Life park awaiting the CHP mayor's speech.
Yıldırım also appeared before cameras on the night to confirm that the YSK's decision meant the same parties would run with the same lists, but showed little emotion for an election he had already admitted defeat in.
İmamoğlu, however, was greeted by a crowd numbering thousands as he gave an enthusiastic speech calling for solidarity among the people of Istanbul and condemning the "handful of people" he accused of sullying the nation's values.
Turkey's pro-Kurdish opposition People's Democratic Party (HDP), which supported İmamoğlu's candidacy, condemned the YSK's decision and announced its party leadership would convene on Tuesday to evaluate it.
While figures from the AKP and its far-right Nationalist Movement Party (MHP) allies have questioned the validity of the election since it became clear the ruling party had lost on April 1, other reports described the YSK as being placed "under extreme political pressure" to cancel the result.
Mehmet Bekaroğlu, a CHP deputy for Istanbul, called the YSK's decision a "great blow for Turkish democracy".
Observers of Turkey had expressed fears a re-run would raise foreign fears around Turkey's rule of law and democracy to an extreme and drive investors away from the country.