The Scottish Parliament voted by a margin of 93 to 30 not to grant a Legislative Consent Motion (LCM) to the keynote Brexit legislation following the First Minister's warnings that it would lead to a Westminster "power grab".
Scottish First Minister Nicola Sturgeon, leader of the separatist Scottish National Party, said Britain is now heading into "uncharted constitutional territory" with a majority in Scotland's semi-autonomous legislature expected to oppose the bill.
The United Kingdom's European Union withdrawal bill is being now debated in the country's parliament and is due for the final vote in the House of Commons in the coming weeks.
Despite the vote, Scottish Brexit Minister Mike Russell has vowed this will "not be the end of the process".
Overruling Holyrood, the Scottish Parliament, would be politically sensitive - particularly over such a historic move as Brexit - and would set a precedent in a constitutional setup that's only 20 years old. But Westminster has identified 24 areas, including agriculture, fisheries and public procurement, where it wants to temporarily retain powers to ensure an orderly withdrawal from the EU.
The governing party at Holyrood, the Scottish Nationalists Party (SNP), won backing from Labour, Liberal Democrats and Greens MSPs to inflict the blow to British Prime Minister Theresa May's government.
The SNP said it would be "outrageous" for the British government to impose the bill on Scotland.
The SNP MP warned Mrs May not to "veto the democratic wishes of the Scottish Parliament" and claimed "the Conservatives are isolated and out of touch with the people of Scotland".
The row centres on how the United Kingdom government and the devolved governments in Edinburgh, Cardiff and Belfast will agree on any changes to about 24 policy areas now controlled by the European Union, such as farm subsidies, fishing quotas, food labelling and state aid.
"I am suggesting that there needs to be, at this stage, a widening of the discussion around a resolution which will involve other parties beyond those who are represented in the two governments".
He said: "It's patently obvious that Nicola Sturgeon wants a political crisis to provide cover for her independence drive".