The rupture of diplomatic relations comes following pronouncements by Flemish parliamentary speaker Jan Peumans on Spain's treatment of the Catalan independence movement.
Mr Peumans stands accused of comparing Spain to Bosnia in the Nineties, a statement he says he never made.
VRT's Madrid correspondent Sven Tuyens speaks of an aggressive decision on the part of Madrid, but one that was in the offing for some time: "The Catalan issue is particularly sensitive in Spain. The government is also adopting clear positions ahead of the forthcoming poll in 2019. All parties reject meddling from abroad. Sympathy for the Catalan movement among certain politicians in Flanders irks Madrid."
"The Belgian embassy in Madrid has been at the eye of a storm in recent years. There is diplomatic to-ing and fro-ing, but the embassy also receives tons of hate mail and calls from angry Spaniards. Flanders has a bad image. It started when the ousted Catalan leader Carles Puigdemont sought refuge in Belgium. Mr Peumans only made matters worse by his pronouncements."
"Madrid is still eager to see Mr Puigdemont behind bars. It struggles to understand why he enjoys support in Flanders. The Spanish foreign office would like the Belgian government to put pressure on its Flemish counterpart.
The diplomatic break has also made the news in Spain. In the EU it seldom happens that a region loses its diplomatic status. It's somewhat of a nuclear option.