"Since World War II, Austria has always adhered to the tradition of protecting refugees. Access to the asylum process has always been a matter of course," said Christoph Pinter, head of UNHCR in Austria.
But the new plans "would represent the breaking of a taboo and a retreat from the protection of refugees," Pinter said in a statement.
On Tuesday, the governing coalition agreed on a draft emergency decree that, once it enters into force, would allow Austria to block the entry of migrants directly at its borders.
Chancellor Christian Kern said that the decree would be applied once the government's upper limit of 37,500 asylum applications for this year is reached.
The draft decree remains at least several weeks from being ready to come into force and could face legal challenges, including at EU level. How the border closures would work in practice also remain unclear.
Austria received a record 90,000 asylum applications in 2015, when hundreds of thousands of migrants, many fleeing conflict in the Middle East, entered Europe.
Austria's far-right Freedom Party (FPÖ), echoing populist parties elsewhere, has stoked concerns about the new arrivals to boost support, putting Kern under pressure to act.
On October 2, the FPÖ's Norbert Hofer stands a good chance of being elected as Europe's first far-right president since 1945, although in Austria the job is largely ceremonial.