The commission's decision followed a ruling by the Constitutional Court in January that said Move Forward, which won last year's general election, had violated the constitution with its plans to change the lese majeste law.
The court ruling found the party's proposed amendments to article 112 of the criminal code constituted an attempt to destroy Thailand's constitutional monarchy.
"There is evidence that Move Forward undermines the democratic system with the king as the head of state," the Election Commission said in a statement on Tuesday.
"The Election Commission has considered and analysed the Constitutional Court verdict and has decided unanimously to ask the Constitutional Court to dissolve the Move Forward party."
Move Forward's progressive agenda has resonated among millions of young and urban voters and it won a stunning victory over military-backed parties in a May election.
But its plan to change lese majeste laws outraged conservative lawmakers allied with the royalist military who torpedoed the party's attempts to form a government.
If the party is dissolved, its leaders could be banned from politics for 10 years.
Thailand's lese majeste legislation carries punishment of up to 15 years jail for each perceived insult or defamation against the king, queen, heir and regent.
Thailand's monarchy is enshrined in the constitution to be held in a position of "revered worship," and many royalists see the lese majeste law as sacrosanct.
The palace typically does not comment on the lese majeste law.
Rights activists say the law has been abused by conservative politicians to smear liberal opponents and stifle institutional reforms. More than 260 people have been prosecuted under the legislation since 2020, including a man facing a record 50 years jail time over Facebook posts critical of the monarchy.
Move Forward party has argued its campaign to change article 112 was aimed at strengthening the constitutional monarchy and preventing the law from being misused.
"We have no intention to overthrow the democratic system with the king as the head of state," Move Forward party spokesperson Parit Wacharasindhu told Reuters on Tuesday.
"We will prove our innocence at the Constitutional Court," he said.
Pita Limjaroenrat, who led the party to its 2023 election victory, told Reuters in an interview last month Move Forward had a succession plan if it was dissolved and the party's ideology would live on.
Move Forward's anti-establishment platform, which includes plans to tackle business monopolies and to keep the military out of politics, is popular with voters but has put the party on a collision course with the interests of powerful conservatives.
The party's predecessor, Future Forward, had championed similar policies and was disbanded in 2020 for violating campaign funding rules.
