Austrian Chancellor Sebastian Kurz announced on Sunday that the country will hold snap elections in early September following the resignation earlier of Vice Chancellor Heinz-Christian Strache.

"Enough is enough," Kurz said in a statement to the media, adding that he does not have the impression Strache's Freedom Party (FPÖ) is willing to change, listing several lesser scandals the far-right party has been involved in.

"The FPÖ is harming our path of change with its behaviour," he went on, calling on voters to give his People's Party "a clear election mandate".

Austria is ruled by a coalition between Kurz's People Party and Strache's FPÖ.

President Alexander Van der Bellen, who described the election as "necessary", said in a statement that he and Kurz would discuss the next steps regarding the new vote on Sunday.

The end for Strache?

Strache announced his resignation on Saturday morning after footage published by German newspapers appeared to show him discussing state contracts with a potential Russian backer in exchange for political support.

The leader of the far-right Freedom Party announced in a news conference he would be replaced by Transport Minister Norbert Hofer and that Kurz had accepted his resignation.

Political analyst Thomas Hofer described the development as "huge". "This has to be the end of Heinz-Christian Strache."

The video, recorded in July 2017 — months before the election that brought this government to power — showed Strache in Ibiza meeting a woman posing as a Russian oligarch's niece.

It shows Strache apparently offering to funnel state contracts towards a company in exchange for political and financial support, though he also said he wanted everything to be done legally.

It was reported on Friday evening by two of neighbouring Germany's leading media — weekly Der Spiegel and newspaper Sueddeutsche Zeitung. The newspaper reports also said the video appeared to be a sting operation.

Senior figures in the government — a coalition of Kurz's conservatives and the Freedom Party — held a crisis meeting on Friday night.

Strache did not reply to a request for comment. Reuters was not able to verify the authenticity of the footage independently, and the German newspapers did not say how they obtained it.

'Appropriate legal steps'

Strache has headed the party since 2005, bringing it back to mainstream electoral success not seen since it was led by the charismatic Joerg Haider. It secured 26% of the vote in 2017's parliamentary election.

The video is also a headache for Kurz, whose party is still leading in opinion polls but far short of a majority. The only other party with enough seats for a majority is the Social Democrats, with which Kurz, an immigration hard-liner, has difficult relations.

The Freedom Party (FPO) co-chairman, Christian Hafenecker, said the party's lawyers were evaluating the material.

Neither Strache nor the FPO ever received or granted any benefits from the persons concerned, Hafenecker said in a statement.

"Since the video was obviously recorded illegally, we are also preparing appropriate legal steps."

Vienna prosecutors said they would study the reports and decide whether there was sufficient cause to open an investigation, a spokeswoman for the prosecutors said.

"The FPO is finished," ran the headline in the tabloid Kronen Zeitung, which featured in the video since the woman said the oligarch wanted to buy a stake.

It remains unclear who was behind the recording.