"We are not taking this step lightly but it is necessary," Chancellor Alexander Schallenberg said.
Unvaccinated people will only be able to leave home for a limited number of reasons, like working or buying food.
About 65% of Austria's population is fully vaccinated, one of the lowest rates in western Europe.
Meanwhile the seven-day infection rate is more than 800 cases per 100,000 people, one of the highest in Europe.
Overall, Europe has again become the region most seriously-affected by the pandemic and several countries are introducing restrictions and warning of rising cases.