"I am so proud that my Hungary report has the support of the European Parliament, but this is foremost about the rights of Hungarian citizens", Sargentini wrote on Twitter after the vote.
On Tuesday, Orban said his country was being targeted for choosing not to be "a country of migrants" as he dismissed charges of corruption.
French President Emmanuel Macron, an outspoken defender of European Union values, has urged the EPP to clarify its stance, saying it could not back both Merkel and Orban at the same time.
Hungarian Prime Minister Viktor Orban listens to a speech in the plenary session at the European Parliament in Strasbourg, France, September 11, 2018.
A number of Bulgarian, Romanian and Croatian MEPs backed Hungary in the European Parliament motion condemning its perceived breaches of core EU values.
"Hungary and the Hungarian people are being condemned because they proved that migration can be stopped and there is no need for migration", Szajer said.
"I'm the first to oppose measures or sanctions against the Hungarian people and of this country, ' said guy Verhofstadt".
"The European Parliament rightly stood up for the Hungarian people and for the EU".
"A resounding majority of MEPs today rejected and condemned the retrograde policies of the Hungarian government, which are taking Hungary away from the path of shared European Union values".
Dubbed so-called "nuclear option", article 7 of the European Union treaty is a mechanism for the European Union to steer wayward members back toward the values on which the world's largest trading bloc were founded, including respect for freedom, democracy and the rule of law.
"Hungary shall not bow to blackmail", said Orban, whose right-wing Fidesz party was re-elected with a landslide majority last April.
Opposition to Orban's vision does not just come from the left.
"Hungary's decisions are taken by voters at parliamentary elections and you state ... that Hungary is not reliable enough to decide what is in its interests".
He also defended his migration policies. Hungary is a neighbouring country with whom we want to build good neighbourly relations. "We have stopped illegal migrants".
The experts have observed that, as a result of the legislation, "t$3 hreats against human rights defenders in Hungary are now regular and widespread, evidently encouraged by the Government".
Orban said it was a case of his political opponents trying to silence those who did not agree with them.
"Hungary will not accede to this blackmail. We think differently about the essence and goal of the family and we do endorse radically different views on migration".
Several non-governmental organizations targeted by the Orban government with restrictive rules - including a special tax on activities considered as promoting immigration and the criminalization of the aiding of asylum-seekers and refugees - also hailed the vote's outcome.
Verhofstadt said there was an "existential battle for the survival of the European project", and described Orban as the "seed of this cause that will ultimately destroy our attractive European project", along with Italian right-wing nationalist leader Matteo Salvini.
Europe's future hangs in balance at the vote, said Michael Ignatieff, head of embattled private university CEU, founded by George Soros. Although Brussels and Budapest have repeatedly clashed over immigration and refugee policy, the vote on Wednesday addressed broader concerns with the state of democracy and rule of law in Hungary.