The panel issued a statement saying members of the royal family must remain politically neutral.
King Maha Vajiralongkorn criticized the princess’s candidacy on Friday, calling it “highly inappropriate.”
The princess had been put forward by a political party loyal to ousted ex-premier Thaksin Shinawatra. But the party withdrew its nomination after the king objected.
The election scheduled for March 24th is expected to pit the pro-junta party led by interim Prime Minister Prayut Chan-o-cha against the pro-Thaksin parties.
Prayut, who led a 2014 military coup, is among the candidates. He aims to maintain the current military-led political system.
The pro-Thaksin camp is expected to face an uphill election battle after the failed attempt to nominate the princess.