Parliament was adjourned to allow the governor general to make arrangements for the election of a new prime minister.
Ahead of the vote, which he lost 22 to 26, Manele heavily criticised the nation’s court for setting a “dangerous precedent” by ruling lawmakers must meet for the no-confidence motion.
His Government for National Unity and Transformation has been at an impasse since March, when it was hit by mass cabinet resignations and the exit of two coalition partners.
On Friday, an appeal court ruled Manele, who avoided the no-confidence motion for seven weeks, must convene parliament by May 7.
The Solomon Islands has been seen as one of Beijing’s closest partners and backers in the South Pacific in recent years, and changes of leader in the strategically located archipelago are closely watched by Western diplomats.
There was a heavy police presence around parliament on Thursday as two camps of lawmakers arrived in separate buses.
The new opposition coalition of six political parties showed it commanded 27 seats as lawmakers entered the 50-seat chamber.
Former foreign minister Peter Shanel Agovaka, who quit cabinet in March and is the frontrunner to become the next prime minister, said Manele had shown weak leadership as ministers conferred favours to business cronies.
“Here we have a group of people who are feeding themselves to the coffers,” he told parliament.
A lack of transparency included no audit reports produced for the large sums of government and donor country money spent to host the 2024 Pacific Games and last year’s Pacific Islands Forum leaders meeting, he said.
The International Monetary Fund raised concerns over accountability, lack of audit reports and the need for anti-corruption reforms in March.
Manele said it was the first time he had heard the complaints about his leadership, rejecting claims he was indecisive.
“I am greatly disappointed, literally not having time to prepare a response to these reasons and allegations,” he said.
“I believe the courts have set a dangerous precedent,” he added, calling the order to convene parliament for the vote “judicial overreach of the highest order.”
With a population of 850,000, the Solomons sits 2,000 kilometres (1,200 miles) east of Australia and receives significant aid from Canberra and Beijing. Debt to China for infrastructure projects doubled last year, budget documents show.
Manele was elected on the floor of parliament in 2024 by a coalition of parties that formed government after a national election did not deliver a clear majority to any single party.