The Supreme Court dismissed a graft case against Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan Friday, ensuring he will contest a general election due next year, just months after the same body ousted ex-prime minister Nawaz Sharif.

The top court, however, disqualified Imran's ally and PTI general secretary Jehangir Tehreen on charges he failed to disclose assets.

Tareen has been barred from holding public office under Article 62 (1) (f) of the constitution, which sets the precondition for a lawmaker to be "sadiq and ameen" (truthful and honest).

Imran had faced being disqualified from holding political office over charges including unreported assets, namely the funds he used to buy a scenic, sprawling property in the Bani Gala hills on the outskirts of Islamabad.

He has dismissed the claims as a political vendetta, saying he used money earned from his career as one of Pakistan's most famous World Cup cricketers to buy the land and that he has the documentation to prove it.

"No omission or dishonesty can be attributed to him. This petition has no merits and is dismissed accordingly," Chief Justice Mian Saqib Nisar said, reading from the judgement to a packed courtroom.

Shortly after the judgement Imran Khan held a press conference in Karachi where he told reporters "Pakistan's highest court has exonerated me".

"The taxpayers and those who earn their money through fair means and pay taxes should not be compared with the robbers and thieves," he added.

Pakistan has been roiled by military coups and instability for much of its 70-year history, and the general election due in 2018 will only be its second ever democratic transition.

Imran's PTI party, which already holds Khyber Pakhtunkhwa, hopes to capitalise on Nawaz Sharif's ousting and the disarray of his ruling Pakistan Muslim League-Nawaz (PML-N) to gain seats.

Few observers of Pakistan's volatile politics are willing to predict with any certainty who will take the election, however.

Nawaz swiftly installed party loyalist Shahid Khaqan Abbasi as prime minister after the court sacked him in late July following a corruption investigation spurred by the Panama Papers leak.

But Abbasi is widely seen as a placeholder as Nawaz himself has refused to relinquish leadership of the party, despite being barred from contesting elections, leaving the PML-N floundering.

Its weakness was brutally exposed last month when it was forced to capitulate to the demands of small and previously unknown Islamist group that had held a weeks-long sit-in in the capital to demand the resignation of the federal law minister over claims linked to blasphemy.

Pakistan's third major party, the once-mighty Pakistan People's Party (PPP), has seen its fortunes plunge since its leader and the country's first female prime minister Benazir Bhutto was assassinated a decade ago on December 27, 2007.

Her son 29-year-old son Bilawal, now chairman of the party, is trying to revive its political fortunes but few are gambling on it regaining its previous status in time for the polls.

If the PML-N does not recover, parties from the religious right could come together to fill the vacuum, tilting Pakistan yet further towards the Islamist extremism it has long grappled with.