CANBERRA (REUTERS) - Australian Prime Minister Malcolm Turnbull said on Friday (Oct 27) the "business of government goes on" despite a citizenship crisis that ousted his deputy and cost the government its parliamentary majority.

Australia's High Court ruled earlier on Friday that Deputy Prime Minister Barnaby Joyce and four other lawmakers are ineligible to remain in parliament because they held dual citizenship at the time of the last election.

"The decision of the court today is clearly not the outcome we were hoping for but the business of government goes on,"Turnbull told reporters in Canberra.

He confirmed that a by-election would be held in Joyce's seat on Dec 2.

The Australian dollar fell a quarter of a US cent after the court announced its ruling and ordered that Joyce must seek a new mandate in his rural New South Wales state electorate.

That left Turnbull's centre-right coalition in the precarious position of a minority government. His Liberal Party is the senior party in a coalition with the smaller National Party, which Joyce led.

Turnbull must now win the support of one of three independent lawmakers to keep his minority government afloat, with two sitting weeks of parliament left until it recesses for the year.

Joyce was one of seven politicians whose eligibility to sit in parliament was thrown into doubt in recent months when it was found they were dual citizens, which bars them from being elected to the national parliament under Australia's constitution.

Joyce, who renounced his dual New Zealand citizenship in August, said he would stand in the by-election.

"It is a tough game, politics," Joyce told reporters in the rural town of Tamworth in his electorate. "You take the hits and the sacrifices."

All seven lawmakers accepted they were dual nationals when they were elected last year but had claimed they were unaware of their status at the time. Some were conferred a second nationality by birth, others by descent.

Of the remaining six, who were from the coalition and minority parties, four were also found ineligible to hold parliamentary office.

Some had already resigned. All were senators, which meant seats in the upper house of parliament could be assigned to party alternatives if they were ruled ineligible.

Australian Solicitor-General Stephen Donaghue had urged the seven justices of the High Court not to interpret the constitution literally.

He argued that five of the seven, including three Cabinet members, should be cleared because they were unaware that they had contravened the constitutional requirement at the time.