“Subsidies are there to support modern technologies that lie in the general interest of all EU member states. This is not the case with nuclear power,” Chancellor Werner Faymann said in a statement.
Austria argues that the Hinkley Point C project is in breach of European law and risks distorting the energy market.
Under the disputed deal, Britain would help fund the construction of two new reactors in south-west England.
As part of the agreement, the British government would guarantee an elevated 35-year fixed electricity rate to French energy group EDF, which would be in charge of the building the plant.
But Austrian Environment Minister Andrä Rupprechter said nuclear energy was no longer able to “survive economically” and should “not be artificially resuscitated through state subsidies”.
“Instead of funding unsafe and costly energy forms that are outdated, we have to support Europe's energy turnaround with the expansion of renewable energies,” he said.
Initially projected to cost £16 billion ($25 billion, €22.6 billion), EU officials now estimate the project will require £24.5 billion.
Despite opposition from activists and several member states, the European Commission approved the project in October after Britain modified funding plans for the deal.
“We are confident that the European Commission's state aid decision on Hinkley Point C is legally robust,” a spokeswoman for Britain's Department of Energy and Climate Change said last week.