Neutral Austria has no choice but to upgrade its armed forces after Russia's assault on Ukraine brought conventional warfare back to Europe, Defence Minister Klaudia Tanner said on Friday.
A new military risk assessment found a missile attack on Austria could not be ruled out.
Austria is not part of Nato and has not sent weapons to Ukraine, although it has as an EU member made humanitarian donations and supported sanctions imposed on Russia.
But the planned €2.5 billion ($2.72bn) increase in defence spending will make Austria one of many European countries rearming in response to the war in Ukraine.
Ms Tanner said a strong military was necessary to defend the country's neutrality and that Austria's tank fleet was overdue an upgrade.
"Conventional warfare has regained its importance," she told a defence meeting in Vienna. "We therefore have to return to protecting Austria's sovereignty against conventional forces.
"There is no way around upgrading and strengthening the armed forces."
The 266-page risk assessment said Austria currently had no defences against many types of rockets and cruise missiles.
It said Austria should consider taking part in a European air defence initiative being spearheaded by Germany because missile warfare was a possibility.
Another goal is to strengthen Austria's preparedness at civilian and economic level, in what many have called a changed security environment in Europe.
Civil society groups "have not yet realised" that they could have a role in a conflict "even if they are not wearing a uniform", Austrian brigadier Peter Vorhofer said on Friday.
Unlike in Sweden and Finland, there has been no significant movement towards joining Nato in Austria or its neighbour Switzerland.
If Sweden and Finland's applications are approved, it will make Austria the only country on the European mainland to be part of the EU but not Nato.