The flat spectrum radio quasar (FSRQ) PKS 1510-089 is known for its complex multiwavelength behavior, and is one of only a few FSRQs detected at very high energy (VHE, $E>100\,$GeV) $γ$-rays. VHE $γ$-ray observations with H.E.S.S. and MAGIC during late May and early June 2016 resulted in the detection of an unprecedented flare, which reveals for the first time VHE $γ$-ray intranight variability in this source. While a common variability timescale of $1.5\,$hr is found, there is a significant deviation near the end of the flare with a timescale of $∼ 20\,$min marking the cessation of the event. The peak flux is nearly two orders of magnitude above the low-level emission. For the first time, curvature is detected in the VHE $γ$-ray spectrum of PKS 1510-089, which is fully explained through absorption by the extragalactic background light. Optical R-band observations with ATOM reveal a counterpart of the $γ$-ray flare, even though the detailed flux evolution differs from the VHE ightcurve. Interestingly, a steep flux decrease is observed at the same time as the cessation of the VHE flare. In the high energy (HE, $E>100\,$MeV) $γ$-ray band only a moderate flux increase is observed with Fermi-LAT, while the HE $γ$-ray spectrum significantly hardens up to a photon index of 1.6. A search for broad-line region (BLR) absorption features in the $γ$-ray spectrum indicates that the emission region is located outside of the BLR. Radio VLBI observations reveal a fast moving knot interacting with a standing jet feature around the time of the flare. As the standing feature is located $∼ 50\,$pc from the black hole, the emission region of the flare may have been located at a significant distance from the black hole. If this correlation is indeed true, VHE $γ$ rays have been produced far down the jet where turbulent plasma crosses a standing shock.