Netanyahu, invited by Hungary's Prime Minister Viktor Orban, faces the ICC arrest warrant over allegations of war crimes in the Gaza Strip as Israel has expanded its military operation in the Palestinian enclave.
Hungary has rejected the idea of arresting the Israeli prime minister and has called the warrant "brazen".
In an announcement timed with Netanyahu's visit on Thursday, Orban said Hungary would withdraw completely from the ICC, an organisation set up more than two decades ago to prosecute those accused of war crimes, crimes against humanity, and genocide.
"This is no longer an impartial court, a rule-of-law court, but rather a political court. This has become the clearest in light of its decisions on Israel," Orban said at a news conference with Netanyahu where they did not take questions.
Orban had invited his Israeli counterpart to Budapest in November, a day after the arrest warrant was issued over Israel's offensive in the Gaza Strip that was launched following an attack by the Palestinian Islamist militant group Hamas on southern Israel.
Israel has rejected the ICC accusations, saying they are politically motivated and fuelled by anti-Semitism.
It says the ICC has lost all legitimacy by issuing the warrants against a democratically elected leader of a country exercising the right of self-defence.
"You stand with us at the EU, you stand with us at the UN and you've just taken a bold and principled position on the ICC ... it's important for all democracies to stand up to this corrupt organisation," Netanyahu told Orban.
The presidency of the ICC on Thursday expressed concern about Hungary's decision to withdraw.
In a letter to Hungary it urged the country to continue to be a resolute party to the Rome Statute, the founding treaty of the ICC.
The court has previously said its decision to pursue warrants against Israeli officials was in line with its approach in all cases and that it is not for states to unilaterally determine the soundness of its legal decisions.
The visit to Hungary was only Netanyahu's second trip abroad since the ICC announced the warrants, following a visit to Washington DC in February to meet US President Donald Trump.
As a founding member of the ICC, Hungary is theoretically obliged to arrest and hand over anyone subject to a warrant from the court.
Hungary ratified the ICC's founding document in 2001 but the law has not been promulgated.
Foreign Minister Caspar Veldkamp of the Netherlands, which hosts the ICC, said on Thursday that until its withdrawal from the ICC was complete, which he said takes about a year, Hungary must still meet its duties.
European Union countries have been split on the ICC warrant.
Some said last year they would meet their ICC commitments while Italy has said there were legal doubts, and France has said it believed Netanyahu had immunity to ICC actions.
Germany's next chancellor Friedrich Merz said in February he would find a way for Netanyahu to visit without being arrested.
Hungary's Orban is an important Israeli ally who has acted to block EU statements or actions critical of Israel.
The Israeli campaign has killed more than 50,000 Palestinians, according to Palestinian health authorities, and devastated the Gaza Strip.
The Hamas-led attack on Israel on October 7, 2023, killed 1200 people and led to more than 250 being taken hostage, according to Israeli tallies.
Hamas condemned Hungary's decision, calling it "a slap in the face to the principle of international justice".
The ICC also issued an arrest warrant against a Hamas leader, Mohammed Deif, in November.
His death was confirmed after the warrant was issued.
Prosecutors had also sought to arrest Hamas leader Ismail Haniyeh and the group's leader in the Gaza Strip, Yahya Sinwar.
Both were killed by Israel before the request was approved.
