The star V426 Sge (HBHA 1704-05), originally classified as an emission-line object and a semi-regular variable, brightened at the beginning of August 2018, showing signatures of a symbiotic star outburst. We aim to confirm the nature of V426 Sge as a classical symbiotic star, determine the photometric ephemeris of the light minima, and suggest the path from its 1968 symbiotic nova outburst to the following 2018 Z And-type outburst. We re-constructed an historical light curve (LC) of V426 Sge from approximately the year 1900, and used original low- (R~500-1500; 330-880nm) and high-resolution (R~11000-34000; 360-760nm) spectroscopy complemented with Swift-XRT and UVOT, optical UBVR_C_I_C_ and near-infrared $JHKL$ photometry obtained during the 2018 outburst and the following quiescence. The historical LC reveals no symbiotic-like activity from ~1900 to 1967. In 1968, V426 Sge experienced a symbiotic nova outburst that ceased around 1990. From approximately 1972, a wave-like orbitally related variation with a period of 493.4+/-0.7-days developed in the LC. This was interrupted by a Z And-type outburst from the beginning of August 2018 to the middle of February 2019. At the maximum of the 2018 outburst, the burning white dwarf (WD) increased its temperature to >~2x10^5^K, generated a luminosity of ~7x10^37^(d/3.3kpc}^2^erg/s, and blew a wind at the rate of ~3x10^-6^M_{sun}_/yr. Our spectral energy distribution models from the current quiescent phase reveal that the donor is a normal M4-5 III giant characterised with Teff~3400K, R_G_~106(d/3.3kpc})R_{sun}_ and L_G_~1350(d/3.3kpc})^2^L_{sun}_ and the accretor is a low-mass ~0.5M_{sun}_ WD. During the transition from the symbiotic nova outburst to the quiescent phase, a pronounced sinusoidal variation along the orbit develops in the LC of most symbiotic novae. The following eventual outburst is of Z And-type, when the accretion by the WD temporarily exceeds the upper limit of the stable burning. At this point the system becomes a classical symbiotic star.