Spain's Prime Minister and Popular Party leader Mariano Rajoy touches his eye as he listens to speeches during the first day of a motion of no confidence session at the Spanish parliament in Madrid, Thursday, May 31, 2018.
Rajoy is being replaced by Socialist (PSOE) leader Pedro Sánchez, whose 84 seats were insufficient for the majority of 176 required in the 350-seat house.
Sanchez faces a tough time catering to demands from small parties whose votes he captured in the no-confidence motion, among them Catalan separatists.
Although Rajoy survived a similar vote last year, today's ballot draws a line under the 63-year-old's rollercoaster time in office, which began in 2011 and saw him implementing drastic spending cuts before winning re-election in 2015 and 2016.
Less than two years ago, the man poised to become Spain's new prime minister was staring at the premature end of an unremarkable political career.
The vote of no-confidence came after 29 former members of his conservative Popular Party were convicted of corruption last week.
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Mr Sanchez, 46, is expected to take office by Monday after King Felipe VI swears him in, and appoint his cabinet next week.
The motion of no confidence was tabled after the PP was implicated in a huge corruption scandal. It also ordered the party to pay back €245,000 (US$290,000) received from the scheme to help finance election campaigns.
Leftist Podemos, which will offer parliamentary support to Sanchez's government, is also unlikely to gain big influence over the new prime minister, who is keen to differentiate his Socialist party from its anti-austerity ally and win back centrist voters.
The former economics professor regained the Socialists' leadership a year ago.
The Basque Nationalist Party, whose five seats were key to Sanchez securing enough parliamentary backing, withdrew support from Rajoy after dozens of people linked to his centre-right People's Party (PP) were sentenced to decades in jail in a corruption trial.
He says the corruption accusations concern only a tiny number of politicians and no current members of government.
"The PP has had corrupt people, I acknowledge it but the PP is not a corrupt party", he said, before accusing Sanchez of "opportunism at the service of personal ambition". "With what moral authority do you speak?" he told Sanchez.