The South China Sea (SCS) serves as an ideal natural laboratory for investigating the breakup of old plate boundaries and the formation of new plate boundaries. Recent IODP drilling has significantly advanced our understanding of lithospheric breakup and seafloor spreading in the eastern sub-basin of SCS. Yet, the lack of drilling evidence means that the continent to ocean transition process in the southwestern sub-basin of SCS, particularly its final rifting stage, remains unclear. This study utilizes a newly processed high-resolution seismic reflection profile from the magnetic anomaly termination zone in the SW-SCS to investigate its crustal architecture, tectonic–stratigraphic framework, and magmatic history. The results reveal the continental crustal and lithospheric breakup points defined by three first-order interfaces: the seafloor, top of basement, and Moho. This allows us to divide the margin into three major tectonic domains: thinning continental crust, continent–ocean transition (COT), and oceanic crust. These domains correspond respectively to syn-extensional, syn-breakup, and post-rift stratigraphic sequences, reflecting distinct evolutionary stages: continental crust breakup, continent–ocean transition (lithospheric breakup), and post-rift phases. The COT domain crust consists of igneous rocks where tops are fault-controlled wedge-shaped lava flows. Our kinematic restoration of southwestern sub-basin complete extension and seafloor spreading history, based on integrated tectonic–stratigraphic and magmatic evidence, suggests the following: (1) continental crustal breakup was primarily detachment fault-driven with minor magmatic contribution, whereas (2) lithospheric breakup was magma-dominated, with faults acting as pathways for magma migration. This work provides critical insights into the lithospheric final rifting of the SCS and their implications for Southeast Asian tectonic evolution.