He was born at Innsbruck, the second son of Leopold V, Archduke of Austria and Claudia de' Medici.

In 1662 he was put forth by his cousin Leopold I, Holy Roman Emperor as a candidate for bishop of Strasbourg.

This included large cash incentives to the cathedral chapter and a promise that Sigismund would be a very hands off ruler.

[1] He was more able than his brother and could have made him a good ruler, but with his early death in 1665, the younger Tyrolean line of the House of Habsburg ended.

Leopold I, who as the heir male succeeded Sigismund Francis, took direct control over the government of Further Austria and Tyrol.