Opponents of the ban have gathered 300,000 signatures, many from those who work in the catering industry and believe their businesses will suffer as a result of the ban.
Currently, smoking is banned in public places in Austria under a 2009 law but restaurants and cafes are exempted and the legislation is not tightly enforced.
The organisers of the demonstration, two prominent Viennese restaurant owners, say they plan to "put out smoke signals" on behalf of private businesses and the protest is supported by the Chamber of Commerce.
"The demo aims to show that restaurateurs should be able to decide for themselves what their guests can and can’t do. We want a referendum, so that finally the topic can be laid to rest,” Heinz Pollischansky told Austrian broadcaster ORF.
The Chamber of Commerce may file a suit in the constitutional court, on behalf of restaurateurs who it says have invested a total of €150 million to create smoking and non-smoking areas in their establishments.
Meanwhile anti-smoking groups have said in an open letter to the economics minister that the three-year ‘transition period’ which gives businesses time to adjust before the ban comes into force is “shameful and scandalous”.
Robert Rockenberger from the Austrian Society for the Protection of Non-Smokers said the three-year grace period was “unacceptable - all restaurant and bar owners need to do to convert their establishments is get rid of the ashtrays”.