Austrian Vice-Chancellor Heinz-Christian Strache said that he was resigning amid the video scandal, according to media reports.
"It was dumb, it was irresponsible and it was a mistake," Strache told at a news conference.
Strache said he would be replaced by Transport Minister Norbert Hofer.
"I do not in any circumstances want my wrong behaviour to provide a pretext for the government to collapse," Strache said.
Austria is likely to hold snap elections after the video released by media showing Heinz-Christian Strache allegedly promising government contracts in return for campaign funding, according to the ORF broadcaster.
Earlier in the day, Austrian Chancellor Sebastian Kurz ruled out further cooperation with Heinz-Christian Strache, according to DPA news agency, which cited its own sources.
Sebastian Kurz is expected to make a statement later on Saturday if he would call a snap election only a year and a half after the coalition was formed.
Spiegel and Suddeutsche Zeitung reported on Friday, citing the video recording that they obtained, that Heinz-Christian Strache discussed the possibility of an acquisition of the Kronen Zeitung newspaper by alleged Russian national Alyona Makarova with her in order to secure help at the legislative elections.
Spiegel and Sueddeutsche Zeitung claimed that the meeting, which took place on Ibiza back in 2017, before Strache became the vice-chancellor, was also attended by another FPO politician, Johann Gudenus.