On 3 March 1577 he was appointed cardinal by Pope Gregory XIII, with a dispensation because of his age of eighteen, and was given Santa Croce in Gerusalemme as his titular church.

[2] Philip II planned to make Albert archbishop of Toledo as soon as possible, but the incumbent, Gaspar de Quiroga y Sandoval, lived much longer than expected; he died on 12 November 1594.

Stadholder Maurice of Nassau, Prince of Orange captured the last Spanish strongholds that remained north of the great rivers, as well as the strategic town of Rheinberg in the Electorate of Cologne.

Finally the Spanish Army of Flanders lost Amiens in September the same year to Henry IV of France despite desperate efforts to relieve the place by Albert and Ernst von Mansfeld.

While pursuing the war as well as he could, Albert made overtures for peace with Spain's enemies, but only the French king was disposed to enter official negotiations.

Under the mediation of the papal legate Cardinal Alessandro de'Medici — the future Pope Leo XI — Spain and France concluded the Peace of Vervins on 2 May 1598.

France tacitly accepted the Spanish occupation of the prince-archbishopric of Cambray and pulled out of the war, but maintained the financial support for the Dutch Republic.

Only a few days after the treaty, on 6 May 1598, Philip II announced his decision to marry his eldest daughter, Isabella Clara Eugenia, to Albert and to cede them the sovereignty over the Habsburg Netherlands.

After obtaining the pope's permission, Albert formally resigned from the College of Cardinals on 13 July 1598 and left for Spain on 14 September, unaware that Philip II had died the night before.

After overtures to the United Provinces and to Queen Elizabeth I of England proved unsuccessful, the Habsburg policy in the Low Countries aimed at regaining the military initiative and isolating the Dutch Republic.

Quite logically, Philip III and his councillors felt more concern for Spain's reputation and for the impact that a compromise with the Dutch Republic might have on Habsburg positions as a whole.

Albert's reputation as a military commander suffered badly when he was defeated by the Dutch stadtholder Maurice of Nassau, prince of Orange in the Battle of Nieuwpoort on 2 July 1600.

The archducal regime encouraged the reclaiming of land that had been inundated in the course of the hostilities and sponsored the impoldering of the Moeren, a marshy area that is presently astride the Belgian–French border.

The archducal regime had plans to bypass the blockade with a system of canals linking Ostend via Bruges to the Scheldt in Ghent and joining the Meuse to the Rhine between Venlo and Rheinberg.

In order to combat urban poverty, the government supported the creation of a network of Monti di Pietà based on the Italian model.

Even though the archduke had certain reservations about the order, the Jesuits received the largest cash grants, allowing them to complete their ambitious building programmes in Brussels and Antwerp.

The foundation of the first convents of Discalced Carmelites in the Southern Netherlands depended wholly on the personal initiative of the archducal couple and bore witness to the Spanish orientation of their spirituality.

After the defenestration of Prague, Albert responded by sending troops to his cousin Ferdinand II and by pressing Philip III for financial support to the cause of the Austrian Habsburgs.

When Albert's health suffered a serious breakdown in the winter of 1613–1614, steps were taken to ensure the accession of Philip III of Spain in accordance to the Act of Cession.

Virtually nothing remains of Albert and Isabella Clara Eugenia' Palace of Coudenberg in Brussels, their summer retreat in Mariemont or their hunting lodge in Tervuren.

They likewise gave commissions to outstanding painters such as Frans Pourbus the Younger, Otto van Veen and Jan Brueghel the Elder.

By far the best preserved ensemble of art from the archducal period is to be found at Scherpenheuvel where Albert and Isabella directed Cobergher, the painter Theodoor van Loon and the de Noles to create a pilgrimage church in a planned city.

As co-sovereign of the Habsburg Netherlands, the title was: "Albert and Isabella Clara Eugenia, Infanta of Spain, by the grace of God Archdukes of Austria, Dukes of Burgundy, Lothier, Brabant, Limburg, Luxembourg and Guelders, Counts of Habsburg, Flanders, Artois, Burgundy, Tyrol, Palatines in Hainaut, Holland, Zeeland, Namur and Zutphen, Margraves of the Holy Roman Empire, Lord and Lady of Frisia, Salins, Mechlin, the City, Towns and Lands of Utrecht, Overijssel and Groningen".