Dynamic consolidation of virtual machines (VMs) through live migration is a promising technology for IaaS datacenters. VMs are dynamically packed onto fewer server nodes, thereby eliminating excessive power consumption. Existing studies on VM consolidation, however, are based on precopy live migration, which requires dozens of seconds to switch the execution hosts of VMs. It is difficult to optimize VM locations quickly on sudden load changes, resulting in serious violations of VM performance criteria. In this paper, we propose an advanced VM consolidation system exploiting postcopy live migration, which greatly alleviates performance degradation. VM locations are reactively optimized in response to ever-changing resource usage. Sudden overloading of server nodes are promptly resolved by quickly switching the execution hosts of VMs. We have developed a prototype of our consolidation system and evaluated its feasibility through experiments. We confirmed that our consolidation system achieved a higher degree of performance assurance than using precopy migration. Our micro benchmark program, designed for the metric of performance assurance, showed that performance degradation was only 12% or less, even for memory-intensive workloads, which was less than half the level of using precopy live migration. The SPECweb benchmark showed that performance degradation was approximately 10%, which was greatly alleviated from the case of using precopy live migration (21%).