The no-confidence motion against Lofven was approved by the parliament with 181 affirmative votes, more than the required 175 votes of the 349-seat parliament, CNN reported. A total of 109 voted no, and 51 abstained.
The Swedish Parliament 'Riksdag' thus dismissed the government with a historic decision.
Barely a year before a general election, Lofven became the first prime minister in Swedish history to be ousted by a no-confidence motion put forward by the opposition.
As things stand, Lofven has one week to decide his next step which could be either another government that can stand majority in the house or midterm elections.
According to CNN, the nationalist Sweden Democrats had claimed the chance to call the vote after the formerly communist Left Party withdrew support for the centre-left government over a plan to ease rent controls for new-build apartments.
Presently, the maximum chargeable property rent is decided by a government body. The new proposal plans to repeal that. The left party was not in support of the new proposal.
They asked the government to drop this proposal. Since it's a weak government surviving on the support of many partners they were unable to do so. So the left leader triggered the Vote of No Confidence motion.
The vote was tabled by 35 MPs (minimum needed to table a vote of no confidence) of Sweden Democrats'. Following the vote, Lofven said he would hold discussions with other parties and decide whether to resign or call snap elections within a week.
The Left party blamed the prime minister for the crisis, saying the Social Democrat-led government had "given up on the Left party and the Swedish people", rather than the other way round.
"It is not the Left Party that has given up on the Social Democrat government, it is the Social Democrat government that has given up on the Left Party and the Swedish people," said Left Party leader Nooshi Dadgostar.