Johnny Russell had put Scotland ahead in the 74th minute after Tony Watt cancelled out Michael Gregoritsch's early opener but Billy Stark's side could only hold on to their lead for 90 seconds before Andreas Weimann equalised.
Raphael Holzhauser scored on the counter-attack as Scotland threw men forward in a bid to secure a last-gasp winner at the Cashback Arena in Altach.
Scotland had gone into the game assured of second place behind Group 10 winners Holland but only the four best runners-up join the top teams in the play-offs for next summer's finals in Israel and they had to throw caution to the wind in the final stages as a draw would not have been enough.
Having lost Jordan Rhodes and James Forrest to the senior squad, and Gary Mackay-Steven to a knee injury, Stark was deprived of another attacking option when Leigh Griffiths pulled out through illness after scoring in Thursday's 3-0 win over Luxembourg.
But the in-form Watt came in after scoring off the bench at St Mirren Park with David Wotherspoon returning from suspension to replace Rhys McCabe.
Austria's hopes had ended with defeat by Holland on Friday but they started on the front foot and Michael Gregoritsch headed into the roof of the net in the eighth minute after getting in front of Ryan Jack to meet an inswinging cross from the right.
Scotland struggled to mount any attacks in the opening quarter and Andreas Weimann had a sight of goal when Gregoritsch headed on a diagonal ball but the Aston Villa forward hit the side-netting.
Wiemann then had a half-hearted appeal for a penalty as he failed to convert Stefan Schwab's left-wing cross under a sliding challenge from Danny Wilson.
Scotland came into the game around the half-hour mark and Watt was just beaten to Wotherspoon's header across goal before Russell missed a great chance.
Paul Hanlon cut in from the left and played the ball beyond the home defence but Russell could not get a decent contact and the home keeper gratefully collected.
Scott Allan fired just over from 30 yards but Scotland had a let-off before the break when Schwab mis-kicked Weimann's cutback from 12 yards.
Schwab headed wide following a corner just after the break but Scotland began to push back their opponents and were level in the 54th minute. Russell leapt brilliantly to head on Wilson's long free-kick and Watt reacted quickly to head over the onrushing goalkeeper.
Scotland brought on Peter Pawlett for Allan but they were almost caught out by a long ball as Wiemann headed wide.
Scotland survived a spell of pressure and stunned the hosts in the 74th minute when Watt got round the outside of his man on the left and drove the ball into the goalmouth.
The Austrian goalkeeper fumbled and Russell bundled the ball over the line.
But just like their 2-2 draw in Bulgaria in May, Scotland lost an instant equaliser. Ross Perry failed to deal with a cross from the left and the ball spun off his knee and fell for Weimann, who dived to head home from six yards.
Hanlon soon came close with a 35-yard lob with the keeper stranded after a challenge with Watt and Scotland pressed in the final 10 minutes.
Watt had a sight of goal from a tight angle but was torn between shooting and crossing and the keeper held his effort.
And Scotland's hopes evaporated just after the 90 minutes were up.
Substitute Gregg Wylde lost the ball on the left wing and Austria broke quickly to set up a two-against-two before Holzhauser ran into the box and fired across Jordan Archer and into the far corner.