It was the second loss for the Addis Ababa based side, after a 2-0 defeat to Adama City last October.
The hosts, Hawassa City were the dominant side in the first half creating numerous goal scoring chances in the process. Captain Mulugeta Mherete and Mujib Kassim came very close to open the scores whilst Adane Girma had the best attempt on goal at the other end.
Hawassa broke the deadlock nine minutes after recess through Firdaaweke Sisay. Desta Yohannis set up Sisay to slot home from close range and give Hawassa a surprising lead.
Saint George managed to equalize when captain Degu Debebe headed home a free kick from Behailu Assefa in the 78th minute.
The hosts turned things around in the dying moments of the game as Asechalew Girma finished off a great cross from Yohannis to clinch a shock victory.
The Horsemen tried to level matters through unlikely source when Ugandan-import Robert Odongkara rose to head a corner, but his effort sailed wide off the post.
Despite the defeat, Saint George, who have played two games less remains at the top of the log with 23 points. Adama City sits second on same points but inferior goal difference with Dedebit in third position on 22 points.
Adama City forward Tafesse Tesfaye leads the top goal scoring chart with nine, two more than Saint George’s Girma and last season’s top scorer, Nigerian Samuel Sanumi of Dedebit.
Meanwhile, the Ethiopian champions will come up against holders TP Mazembe of DR Congo next weekend at the 1/16th round of the Orange CAF Champions League.