Under the law, the garment will be banned in public institutions, schools, areas of administrative and public services.
Austria’s coalition government has announced plans to ban full-face veils in public and to restrict eastern European workers’ access to the country’s labour market.
The proposals were announced late on Monday as part of a wider government programme aimed at countering the rise of the far-right, anti-Islam Freedom Party.
“The full-face veil will be banned in public spaces,” said Austrian Chancellor Christian Kern after ministers signed off on the new programme of policies set to be implemented over the next 18 months.
Kern said he wanted to avoid “giving 600,000 Muslims in Austria the feeling that they are not part of our society”.
The 35-page programme also includes beefing up surveillance and security measures, obliging migrants granted the right to stay to sign an “integration contract” and a “statement of values”.
“Those who are not prepared to accept Enlightenment values will have to leave our country and society,” according to the text.
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It also promises the government will lower taxes and non-wage labour costs, restrict access of foreign workers to the Austrian labour market and create 70,000 new jobs.
Many of the measures set out in the programme must be hammered out in detail and receive parliamentary approval before they can come into force.
The move comes eight months after Kern, 51, replaced Werner Faymann at the head of an unhappy “grand coalition” between his Social Democrats and the centre-right People’s Party.
Both are facing a strong challenge from the Freedom Party, which like similar groups across Europe has stoked concerns about immigration, security and the European Union to top opinion polls.
Last month the Freedom Party candidate came close to winning Austria’s presidential election.
With a parliamentary election due next year, Kern of the Social Democratic Party hopes the package will provide fresh impetus for an eight-month-old coalition widely seen as ineffective.
“We agreed that we must work faster and more clearly,” conservative Vice Chancellor Reinhold Mitterlehner told a joint news conference.
“It is now up to us to do what governing parties do, namely implement the programme.”