The powerful center-right alliance in the European Parliament has voted to suspend membership of Viktor Orban's party. Ahead of the vote Orban said that Fidesz would quit the EPP if its membership was suspended.
The European People's People party voted on Wednesday to suspend membership for Hungary's ruling Fidesz party.
Delegates of the main center-right alliance in the European Parliament are opposed to Hungarian Prime Minister Viktor Orban's authoritarian style and anti-European Union, anti-migration policies.
Campaign posters for the upcoming European elections taking aim at Jean-Claude Juncker and George Soros were a particular point of contention.
Orban's office earlier said that if his party's membership was suspended then Fidesz will completely leave the group.
Fidesz has been distancing itself for years "from Christian democratic values," he said. Juncker was elected to the Commission presidency in 2014 as the EPP's lead candidate.
The head of German Chancellor Angela Merkel's Christian Democratic Union (CDU), Annegret Kramp-Karrenbauer, took a softer line, telling Reuters news agency that the EPP could temporarily "freeze" Fidesz's membership.
"As long as Fidesz does not fully restore trust there cannot be normal full membership," she said.
Tensions between the EPP and Orban had been brewing for years before the poster incident. Since 2010, Orban has tried to secure Fidesz's grip on power by changing the constitution and restricting independent media outlets, charities and universities.