Scott Morrison has become the first former prime minister to be censured by the parliament over his secret appointments to multiple ministerial portfolios.
The censure motion passed the House of Representatives on Wednesday 86 votes to 50.
Liberal MP Bridget Archer urged her party to draw a line in the sand over their former leader before she voted for the censure.
Ms Archer said while the coalition made many good decisions to protect the nation during the pandemic, Mr Morrison's actions were "entirely unnecessary".
"I do not accept any of the explanations put forward by the former prime minister and I'm deeply disappointed by the lack of a genuine apology or, importantly, understanding of the impact of his decisions," she said.
While senior Liberal MPs dismissed the motion as a political stunt, the backbencher said it would be hypocritical for her not to support it because of her advocacy for integrity.
"This issue sits at the heart of the ability of our party to move forward and this is a clear opportunity for a line to be drawn and to move in the right direction," Ms Archer said.
Former minister Karen Andrews, who has previously called for Mr Morrison to resign from parliament, abstained from the vote.
Mr Morrison defended his decision and described the powers as a "dormant redundancy".
The former Liberal leader said the motion amounted to "political intimidation" by the Albanese government.
"I note the criticisms made of my decisions to be authorised to administer a series of departments have been made from the safety and relative calm of hindsight," he said.
"The government's response to censure and prosecute this motion is to engage in the politics of retribution and nothing less."
Mr Morrison said if he had been asked about the appointments at press conferences, he would have responded truthfully.
He also offered a qualified apology "to those who were offended".
"I acknowledge that non-disclosure of arrangements has caused unintentional offence and extend an apology to those who were offended," he said.
"But I do not apologise for taking action in a national crisis in order to save lives and to save livelihoods."
Opposition MPs shook hands with Mr Morrison after he finished. Ms Archer remained seated.
Prime Minister Anthony Albanese said he expected the parliament to see "some semblance of contrition" from his predecessor.
"We got none of that. Instead, we got hubris, arrogance and denial," he said.
Mr Albanese said Australia's democracy was precious and there was no room for complacency.
"The former prime minister owes an apology to the Australian people for his undermining of democracy."
House leader Tony Burke said the censure motion went to the core of the Westminster principle of responsible government.
Mr Burke said the former prime minister undermined, rejected, attacked and abused the standards expected of parliamentarians.
He said Mr Morrison's conduct had prevented the House of Representatives from doing its job and it was "so completely unacceptable".
Censure motions do not have any legal consequences, but they are rare and give parliamentarians the chance to formally disapprove of their colleagues.
Mr Morrison appointed himself minister of health, finance, industry, science, energy and resources, treasury and home affairs between 2020 and 2021, without the knowledge of most of his coalition colleagues.
The government agreed to implement all six recommendations from former High Court judge Virginia Bell's report into Mr Morrison's conduct, to improve the transparency of ministerial appointments.
Legislative changes to improve transparency are expected to get the coalition's backing.
Mr Morrison said he supported the changes recommended in the Bell report.