“I have suggested to the president of the republic that new elections be carried out, at the earliest possible date,” said Kurz.
Media reports emerged on Friday alleging that Strache promised public contracts in return for campaign help from a fake Russian backer he met on the Spanish island of Ibiza a few months before 2017's parliamentary elections in Austria.
“After yesterday's video, I must say quite honestly: Enough is enough,” said Kurz.
“The serious part of this (video) was the attitude towards abuse of power, towards dealing with taxpayers' money, towards the media in this country,” Kurz said, adding that he had been personally insulted in the footage.
The latest scandal appears to have been the last straw after a string of controversies over extremist sympathies among officials from Strache's Freedom Party (FPOe).
“Even if I didn't express myself publicly at the time, there were many situations that I found difficult to swallow,” Kurz said of his time in government with the FPOe since December 2017.
He said that the FPOe was damaging Austria's reputation abroad and that meetings with FPOe representatives on Saturday had left him with the impression that it was not prepared to make the changes necessary to stay in government.