Chancellor Sebastian Kurz said he was pulling out of the Global Compact for Safe, Orderly and Regular Migration pact to in a bid to "defend his country's national sovereignty".
The non-binding United Nations pact was launched to make migration safer and addresses issues such as how to protect migrants, how to integrate them into new countries and how to return them to their homelands.
Kurz's coalition partner, the far-right Freedom Party (FPOe), has been pushing for Vienna to reject the pact.
The Global Compact for Safety, Orderly and Regular Migration, which isn't legally binding, was approved in July by all 193 member nations except the United States, which backed out a year ago.
The decision has enraged European Commission President Jean-Claude Juncker who described the move as "unacceptable".
"We regret the decision the Austrian government has taken".
Louise Arbour, the United Nations special representative for worldwide migration, said: "The question of whether this is an invidious way to start promoting a "human right to migrate" is not correct".
Austria will also abstain during the vote in the (UN) General Assembly in September next year, and hand over to the UN a statement, demanding that the government's position be recorded.
Austria is not, however, the first country to back out of the pact. While it aims to foster global cooperation on migration, stating that, "no State can address migration alone", the pact also "reaffirms the sovereign right of States to determine their national migration policy and their prerogative to govern migration within their jurisdiction, in conformity with worldwide law".
Kurz and far-right Vice Chancellor Heinz-Christian Strache expressed concerns about the pact this month, saying it could restrict sovereignty.
According to Austrian broadcaster ÖRF, the government objected to the creation of migrant as a category that does not exist in public law.
The country now holds the European Union's rotating presidency, and Kurz has made curbing unregulated migration a priority.
"The [Austrian] republic takes a sovereign decision on the admission of migrants to Austria". It is not a legally binding document.
Poland is also mulling over withdrawing from the pact.
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