Johnny Russell had put Billy Stark's boys ahead in the 74th minute after Tony Watt had cancelled out an early opener, but the Dark Blues could only hold on to their lead for 90 seconds.
And Raphael Holzhauser scored on the counter-attack as Scotland threw men forward in a bid to secure a last-gasp winner at the Cashpoint 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, leading them to throw caution to the wind in the final stages as a draw would not have been enough.
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 on eight minutes.
Scotland began to push back their opponents after the break and were level in the 54th minute, Russell leaping brilliantly to head on to Watt who nodded home
And in the 74th minute 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 Scotland lost an instant equaliser when Ross Perry failed to deal with a cross from the left and the ball spun off his knee and fell for Andreas Weimann who pounced.
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 to end Scotland's dream.