It was a stunning blow for Orban - a close ally of both US President Donald Trump and Russian President Vladimir Putin - who quickly conceded defeat after what he called a "painful" election result.
US Vice President JD Vance had made a visit to Hungary just days earlier, meant to help push Orban over the finish line.
Election victor Peter Magyar, a former Orban loyalist who campaigned against corruption and on everyday issues like healthcare and public transport, has pledged to rebuild Hungary's relationships with the European Union and NATO, ties that frayed under Orban.
European leaders quickly congratulated Magyar, who won a comfortable majority in Hungary's 199-seat legislature, opening the door for meaningful reforms of a system critics in the European Union said subverted democratic norms.
With nearly all ballots counted, Tisza was set to win 138 seats, more than the two-thirds majority Magyar would need to undo Orban's constitutional overhaul and combat corruption.
"I congratulated the victorious party," Orban told followers. "We are going to serve the Hungarian nation and our homeland from opposition."
In a speech to tens of thousands of jubilant supporters at a victory party along the Danube River, Magyar said his voters had rewritten Hungarian history.
"Tonight, truth prevailed over lies. Today, we won because Hungarians didn't ask what their homeland could do for them - they asked what they could do for their homeland. You found the answer. And you followed through," he said.
On the streets of Budapest, drivers blared car horns and cranked up anti-government songs while people marching in the streets chanted and screamed.
Many revellers chanted "Ruszkik haza!" or "Russians go home!" - a phrase used widely during Hungary's 1956 anti-Soviet revolution, and which had gained increasing currency amid Orban's drift toward Moscow.
Turnout in the election was nearly 80 per cent, according to the National Election Office, a record number in any vote in Hungary's post-Communist history.
During his 16 years as prime minister, Orban launched harsh crackdowns on minority rights and media freedoms, subverted many of Hungary's institutions and has been accused of siphoning large sums of money into the coffers of his allied business elite, an allegation he denies.
He also heavily strained Hungary's relationship with the EU. Although Hungary is one of the smaller EU countries, with a population of 9.5 million, Orban has repeatedly used his veto to block decisions that require unanimity.
Most recently, he blocked a 90-billion euro ($A149 billion) EU loan to Ukraine, prompting his partners to accuse him of hijacking the critical aid.
A former insider within Orban's Fidesz, 45-year-old Magyar broke with the party in 2024 and quickly formed Tisza.
Since then, he has toured Hungary relentlessly, holding rallies in settlements big and small in a campaign blitz that recently had him visiting up to six towns daily.
With Reuters
