"April 24, 1915 marks the beginning of the persecutions, which ended in genocide," parliament president Doris Bures said on Wednesday, before inviting MPs to stand and observe a minute's silence for the victims.
The leaders of the country's six major parties also issued a statement declaring that Austria, as a former ally of the Ottoman Empire, had a "duty to recognise and condemn these horrific events as genocide".
They called on Turkey - which does not accept the highly sensitive term - to take responsibility for its role in the mass murders.
"It is Turkey's duty to face the dark and painful chapter of its past and recognise the crimes committed against Armenians under the Ottoman empire as genocide," the statement read.
While Austria's declaration holds no legal power, it represents nevertheless an important symbolic step.
Armenian Foreign Minister Edward Nalbandian said that Yerevan welcomed the
move by Austria.
"Armenia welcomes the declaration adopted by Austria's highest lawmaking body on the genocide committed by the Ottoman Empire against the Armenians," Nalbandian said in a statement.
"With this step, Austria has made a serious contribution to the noble task
of preventing genocides and crimes against humanity."
Armenians say up to 1.5 million of their ancestors were killed in a targeted military campaign to eradicate the Armenian people from Anatolia, in what is now eastern Turkey.
They have long sought to win international recognition of the massacres as genocide.
But Turkey insists that both Turks and Armenians died as Ottoman forces battled the Russian empire for control of Anatolia during World War I.
On Monday, Turkish Prime Minister Ahmet Davutoglu said his nation shared "the pain" over Armenians' deportation in 1915, but stopped well short of using the word "genocide".
Earlier this month, Pope Francis drew Turkey's wrath after describing the Armenian killings as "the first genocide of the 20th Century".
More than 20 nations, including France and Russia, have formally recognised genocide against the Armenians.
Austrian President Heinz Fischer has declined an invitation to attend the official commemoration ceremony in Armenia on April 24, and is instead sending an ambassador.