However, in Austria most executive actions of great extent can only be exercised by the president, upon advice or with the countersignature of the chancellor or a specific minister.

The first head of government after the monarchy was the State Chancellor of German-Austria, an office again only held by one person; Karl Renner.

Nevertheless, when Maximilian's grandson Ferdinand I succeeded him as Archduke of Austria in 1521, his elder brother Emperor Charles V (1519–1556) appointed Mercurino Gattinara as "Grand Chancellor of all the realms and kingdoms of the king" (Großkanzler aller Länder und Königreiche).

The separate position of an Austrian Court Chancellor appeared as a Österreichische Hofkanzlei around 1526, when the Habsburg monarchy arose with the Bohemian and Hungarian inheritance; it was however once again merged with the equivalent Reichshofkanzlei office of the Holy Roman Empire in 1559.

Upon the 1620 Battle of White Mountain and the suppression of the Bohemian revolt, Emperor Ferdinand II had separate Court Chancelleries established in order to strengthen the unity of the Habsburg hereditary lands.

[2] The eighteenth century was dominated by Prince Wenzel Anton of Kaunitz-Rietberg (1753–1792), who was Chancellor to four Habsburg emperors from Maria Theresa to Francis II, with the titles of both Hofkanzler and Staatskanzler.

He had replaced Cobenzl with Johann Philipp Stadion, Count von Warthausen (1805–1809) the previous year, but his career was in turn cut short in 1809 following yet another Austrian defeat by Napoleon at the Battle of Wagram and subsequent humiliation at the Treaty of Schönbrunn.

With the enactment of the Constitution of Austria on 10 November 1920, the actual term Bundeskanzler was implemented as head of the executive branch of the First Austrian Republic.

For this reason, the Chancellor usually is the leader of the largest party in the National Council, or the senior partner in a coalition government.

The President usually declines the offer of resignation and directs the Chancellor and the cabinet to operate as a caretaker government until a new National Council is in session and a new majority leader has emerged.

Neither Chancellors nor ministers need to be confirmed by either house of parliament; the appointees are fully capable of discharging the functions of their respective offices immediately after having been sworn in.

The first successful vote of no confidence in Austrian federal politics took place in May 2019 when Sebastian Kurz was ousted as Chancellor.

The constitution does not vest the Chancellor with the authority to issue directions to ministers; it characterizes his or her role in the cabinet as that of a primus inter pares.