Hungary has indefinitely suspended the application of a key EU asylum rule, which requires claims by migrants to be processed in the European Union country they first arrive in, a government spokesman has said.
Tuesday's announcement means EU states cannot send back asylum seekers to Hungary even if they find them violate the rule that says they have to live in the country that registered them as refugees.
Zoltan Kovacs, the Hungarian government spokesman, said "the boat is full", referring to the recent influx of migrants.
"We all wish for a European solution, but we need to protect Hungarian interests and our populaton," he said.
The European Union asked Hungary on Tuesday to urgently clarify its suspension of the rule.
So far this year about 60,000 migrants have entered Hungary, most of them via Serbia, according to government figures.
In 2014, the country already took in more refugees per capita than any other EU country apart from Sweden, recording 43,000 arrivals in total.
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Hungary is in Europe's passport-free Schengen zone, which means that once migrants have arrived in the country, they can travel freely elsewhere in the other 25 nations in the bloc.
As a result, many try to continue on to other European states, including Austria and Germany.
However, according to the so-called Dublin III regulation, these nations can return the asylum seekers to Hungary to process their application.
Hungary says it has now "exhausted the resources at its disposal" to accept further refugees.
But Austrian Interior Minister Johanna Mikl Leitner strongly condemned Hungary's decision.
"Anyone who wants to have a Europe without borders, needs to respect the Schengen rules. Of course this also means respecting the Dublin rule."
Hungary's right-wing Prime Minister Viktor Orban, who has a record of spats with Brussels, has been among the harshest critics of EU plans to manage the upsurge in migrant numbers by spreading the burden around the 28-nation bloc.
Last week, Orban sparked further controversy when he announced it was building a four-metre high fence on its border with Serbia to keep out migrants.