The 19-year-old was sent home after finishing bottom of the public vote alongside Misha B. Both acts are mentored by Kelly Rowland, who missed this week's live shows due to illness.
Habibis chose 'Shelter' by The xx as her survival song, but the judges were more impressed by Misha's sing-off performance of 'Use Somebody' by Kings of Leon.
All of the panel expressed surprise and disappointment in the result when host Dermot O'Leary approached them for their votes.
Louis Walsh, who yesterday described Habibis as a "secretary who sings on weekends", chose to save Misha based on her natural "star quality".
Tulisa Contostavlos addressed her personal issues with Misha when casting her vote, accepting that she couldn't base her decision on "personalities and connections".
"I have to go to the person I can most relate to musically, the person who represents the music from my roots," she said, before also sending Habibis home.
O'Leary next turned to Rowland, who phoned in from her sickbed in Los Angeles to give her verdict. Upon witnessing Misha's heartfelt tears, she made the deciding vote that sent Habibis home, saying: "I see how bad one of you wants it more than the other."
Gary Barlow also revealed that he would have opted to save Misha.
Speaking after her elimination, Habibis vowed: "I'm never going to forget [this experience]. I'm going to keep working hard and prove that I should have stayed in this competition."
Despite voting her out, Rowland remained confident of Habibis's chances of success, declaring: "She is remarkable and she has such an incredible voice. I think we all have developing to do as an artist. I can't wait to see what the future holds for her."
Nu Vibe and Sami Brookes were the first two X Factor finalists to be eliminated by public vote. Barlow is now the only judge to still have three acts remaining.
The X Factor continues next Saturday (November 5) at 8pm on ITV1.