Austria on Wednesday announced a plan to reduce by half the number of people allowed to claim asylum in the country in 2016.
Chancellor Werner Faymann told a news conference in the Austrian capital, Vienna, that leaders from across the nation had agreed on a four-year cap on refugees.
"We can't take in all asylum-seekers in Austria," Faymann said.
Under the new plan, the number of asylum claims would be limited to 37,500 this year, less than half of the 90,000 claims received last year.
The measure seeks to limit the total amount of claims to "about 130,000" over the next four years, Faymann said, adding, "We have fixed this number as a guideline... We will study what happens when this limit is reached."
The Austrian chancellor said border controls would have to be stepped up "massively."
The cap, which accounts for 1.5 percent of Austria's 8.5 million population, would serve as a "wake up call for the EU" in an "emergency situation" the 28-nation bloc is facing, Faymann said.
Austria is also constructing a 3.7-kilometer (2.3-mile) fence on Austria's main border crossing with Slovenia.
Europe is facing an unprecedented influx of refugees who are fleeing conflict-ridden zones in Africa and the Middle East, particularly Syria.
Austria has become a key transit country for many asylum seekers entering the European Union (EU) zone.
Many blame major European powers for the unprecedented exodus, saying their policies have led to a surge in terrorism and war in those regions, forcing more people out of their homes.
According to figures released by the International Organization for Migration (IOM), more than one million refugees have reached Europe’s shores in 2015, while over 3,700 people either died or have gone missing in their perilous journey to the continent.