UK Prime Minister Theresa May's new Brexit deal has been defeated 242 to 391 in the House of Commons, a majority of 149.
The vote came after a previous deal was defeated by 230 votes in January.
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In that vote, 202 people voted for the deal, while 432 voted against.
Following the vote, Ms May announced that there would be a free vote on Thursday on whether to leave the EU with or without a deal.
"I profoundly regret the decision that this House has taken tonight," she said immediately after the vote.
"I continue to believe that by far the best outcome is that the United Kingdom leaves the European Union in an orderly fashion with a deal."
If MPs vote to leave without a deal, she said that would become Government policy.
European Commission President Jean-Claude Junker suggested before the vote that there would be no third opportunity for Ms May to renegotiate the deal before it is set to leave the EU on March 29.
It was a sentiment Ms May expressed after the vote.
"The deal we have negotiated is the best, and indeed the only, deal available."
Labour leader Jeremy Corbyn responded to the vote by saying the Government must accept that Ms May's deal is "clearly dead" and the prospect of a 'no deal' must be taken off the table.
"The Prime Minister has run down the clock and the clock has been run out on her," he said.
"Maybe, it is time instead that we had a general election and the people can choose who their Government should be."
Sir Vince Cable, the leader of the UK's Liberal Democrats, also compared Ms May's second defeat to the American war of independence.
Wednesday's defeat is the fourth biggest in modern UK democratic history, with the January vote remaining the largest.
The House of Commons' website with the list of MPs which voted for and against the deal crashed quickly after the vote.
However, it is understood that three Labour MPs voted for the deal, while 75 Conservative MPs voted against it - therefore voting against the desire of their Prime Minister.
European Council President Donald Trusk responded to the vote by saying the EU was disappointed by the result but that all that could be done by the EU to reach an agreement had been done.
He believed Wednesday's vote increased the likelihood that the UK would leave the EU without a deal.
The EU's chief negotiator, Michel Barnier, tweeted after the vote that the EU had done everything it could.
"The impasse can only be solved in the UK. Our no-deal preparations are now more important than ever before."
Crowds outside the House of Commons began cheering when the result was announced, including those who support Brexit but don't support Ms May's deal.
A key point of contention with the previous deal, and which remains unchanged in the eyes of some politicians, was the issue of the Irish border backstop.
On Saturday, it appeared MPs would support the deal after the European Union (EU) indicated legal ways for the UK to unilaterally leave the backstop.
But the plan was rejected by Ms May's cabinet and the country's Attorney General Geoffrey Cox said while it did "reduce the risk" of the UK being trapped in the backstop, it didn't remove it altogether.
The advice from Mr Cox concerned many MPs who said it indicated no significant changes had been made since January.
In January, following the first deal's defeat, New Zealand Finance Minister Grant Robertson said Kiwi exporters should prepare for any outcome to Brexit.
"It's unfortunate this situation has occurred to create that uncertainty, but the best we can do is what we can control, which is our own preparation," he said.