King Bhumibol, 88, is the world's longest reigning monarch, but has spent much of the last year in hospital and is rarely seen in public.
He is widely revered in Thailand, where he is seen as an arbiter in the divided political arena.
His doctors said they had now sought formal permission for the king to stop performing any official duties.
Thailand marks 70 years of king's reign.
The palace statement, released late on Sunday night, said the king's blood pressure had dropped as he was being prepared for haemodialysis, a procedure used to treat kidney failure.
He was placed on a ventilator and medication helped return his pressure to normal levels, it added. Doctors are now monitoring his condition closely.