“We can confirm that a Russian diplomat will be expelled,” the ministry said in a statement to AFP, adding his behaviour had violated diplomatic relations.
The ministry declined to give further details.
The Kronen Zeitung tabloid said the diplomat had been given until September 1st to leave the country, adding he had spied with the help of an Austrian citizen at a high-tech enterprise for years.
The Russian Embassy in Vienna slammed the expulsion order.
“We are outraged by the authorities' unfounded decision, which is detrimental to constructive relations. We are sure that a corresponding response from Moscow will not be long in coming,” it said in a tweet.
Austria has boasted close ties with Russia in recent years.
In 2018, Austria said it would not follow a number of other EU countries in expelling Russian diplomats over the poisoning of former Russian spy Sergei Skripal in Britain, stressing its neutrality.
Raising eyebrows, former foreign minister Karin Kneissl – under Austria's previous conservative and far-right coalition government – invited Russian President Vladmir Putin to her wedding later that year.
Both sides insisted the invitation was a private matter. But widely circulated photos of Kneissl bowing to Putin after their dance raised questions of Austria's neutrality.
In June, a retired Austrian army colonel was jailed for three years after being convicted of spying for Russia.
The 71-year-old who has not been named “betrayed state secrets at the expense of Austria for a foreign secret service”, a Salzburg court ruled.
The verdict found he also “deliberately disclosed a military secret”.