With the vote, the EP endorsed the report of Green MEP Judith Sargentini, which said recent developments in Hungary represent a systematic threat to democracy, the rule of law and fundamental rights in the country and constitute a clear risk of a serious breach of European Union values.
Eight Bulgarian MEPs, including five from the European Popular Party, EPP, one from the Socialists and Democrats, S&D, and two from the Conservatives and Reformists group, ECR, opposed the motion.
"Am in harmony with today's decision", he said.
These were dubbed the "Stop Soros" laws after liberal Hungarian-born United States billionaire George Soros, who is accused without evidence by Orban's government of orchestrating migration to Europe.
"The hot potato is now in the hands of the EP and this is the first time that the EP has dealt with this topic; the last time, when it was about Poland, the procedure was launched by EC", Suica told N1 regional TV station.
For years, Orban has successfully deflected much of the worldwide condemnation about Hungary's electoral system, media freedoms, independence of the judiciary, mistreatment of asylum-seekers and refugees and limitations on the functioning of non-governmental organizations, but criticism has been growing even within the European People's Party, to which his Fidesz party belongs.
The 197 votes cast against parliament's bid illustrate the substantial minority of European opinion who see Orban as a crusader for the rights of nation states and ethnic majorities against rules of civic behaviour agreed on by the EU in Brussels.
Asked about his expectations about the result of Wednesday's vote on the report, Orban said he was sure it would gather the two-thirds support needed for approval and then attempts would be made to expel Fidesz from the EPP.
But Weber, a close ally of Merkel, also spoke of "building bridges" with Hungary and noted the EU's failure to take action in a similar rule-of-law case against Poland.
The European parliament has voted to pursue disciplinary action against Hungary over alleged breaches of the EU's core values. "You think you know better than the Hungarian people what the Hungarian people need".
Geert Wilders, the leader of the Dutch anti-immigration Freedom Party, called the vote - which also weighed on Hungarian assets - "a bloody shame". But Orban remained steadfast that his policies wouldn't change.
Aside from its anti-immigrant stance, Orban's government is also accused of silencing independent media and academia, removing independent judges, cracking down on organisations helping homeless people, migrants or disadvantaged groups, such as Roma, and condoning government corruption.
Before the vote, EPP leader Manfred Weber, who has announced his candidacy for the Commission's top job and has been a staunch defender of Orban until now, indicated that his patience for his Hungarian party colleagues was coming to an end. "They made it clear that human rights, the rule of law and democratic values are not up for negotiation", said Berber Biala-Hettinga, an expert on human rights in the European Union, in a statement from the group.
The motion against Orban's Hungary goes well beyond the migration issue.
The group may now consider whether to suspend Orban's Fidesz party.