A total of 7,366 people voted against keeping a directly-elected major, with 5,177 people voting in favour of preserving the position.
Stuart Drummond, the former Hartlepool FC football mascot H'Angus the Monkey, stood as a stunt in 2002 and made headlines around the world when he won. He was then re-elected in 2005 and again in 2009.
Mr Drummond will continue to serve as mayor until next May and will work on the council’s next budget.
He also loses his job as chairman of Cleveland Police Authority following the election of Labour’s Barry Coppinger as the police force’s first elected commissioner.
Following the count, Mr Drummond said: “I’m a big supporter, obviously, of directly elected mayors and I’m particularly disappointed by such a low turn-out (18 per cent).
“But the public of Hartlepool are very rarely wrong and it’s been an honour to serve as mayor.
“I’m still here for six months and I’m certainly not going to take my foot off the pedal. There’s very important work to do.
“My time as mayor has been a rollercoaster ride, with never a dull moment. I was delighted to be voted in three times. The truth is I haven’t really looked back, there’s always something coming up.”
Asked about the future, Mr Drummond, who is married with children, said he would start “looking for something to pay the bills”.
He declined to criticise Labour for pushing for the referendum. The outcome means Hartlepool Council will now return to a committee system.