KATMANDU, Nepal—The world’s last Hindu kingdom became its newest secular republic Wednesday as Nepal’s lawmakers, led by former communist insurgents, abolished the monarchy that had reigned over this Himalayan land for 239 years.

Throughout the day, thousands of people marched, danced and sang in the streets of Katmandu in anticipation of the vote, waving red hammer-and-sickle flags as dour King Gyanendra awaited his fate in the pink concrete palace that dominates the city’s center.

He finally found out the fate of his throne late in the day when, as expected, the newly elected Constituent Assembly declared the country a republic and abolished the monarchy by a vote of 560-4. The assembly’s 37 other members were not present.

“We have entered a new era today,” said Prime Minister Girija Prasad Koirala, calling Nepal’s rebirth as a republic “the dream of the whole nation.”

There was no immediate reaction from the 61-year-old king, who has remained silent in recent months as it became apparent that his days on the throne were numbered.

He now has 15 days to quit the 1970s-era palace and move to his large private residence in the city—or face the possibility of being removed by force.

As word of the republic’s declaration spread through Katmandu, groups of celebrating young men yelled in the streets and set off firecrackers.

“The people in Nepal have defeated the autocrat Gyanendra,” said Gopal Thapa, a 23-year-old supporter of the Maoists, the former rebels. “Nepal is now the people’s republic.”

All around him, a crowd celebrating outside the convention center, where the vote was held, chanted “Long live the republic!” and denounced Gyanendra as a thief.

Not since the Shah of Iran was deposed in the bloody 1979 Islamic revolution has one of the world’s monarchs been forced from his throne.

But while the end of Nepal’s royal dynasty may have come in a peaceful vote, the stage for the monarchy’s demise was set by a communist insurgency that bled Nepal for a decade, and a 2001 palace massacre in which a gunman, allegedly the crown prince, assassinated King Birendra and much of the royal family before killing himself.

Gyanendra then assumed the throne. But the killings helped pierce the mystique surrounding a line of kings who had once been revered as reincarnations of the Hindu god Vishnu, and Gyanendra was dogged by rumors that he was somehow involved in the massacre.

His 2005 seizure of power from a civilian government only made matters worse. He said he needed total authority to crush the Maoists, but he quickly began locking up peaceful opponents and found himself beset by an intensifying insurgency and a faltering economy.