The Austrian parliament on Wednesday passed a "law on Islam" supported by the ruling coalition of the Social Democrats and center-right People's Party, which holds the majority of seats.
Despite opposition from several Islamic organizations in the country, especially Turkish ones, lawmakers backed a government's decision taken last December to enforce the law.
The new bill bans any foreign funding for imams in the country, who will also have to learn German and receive training and qualification in Austria.
According to the law, Muslims serving in the army or receiving medical treatment in hospitals or serving prison sentences will for the first time receive aid and care, so as not to allow extremist thoughts a chance to exist among them.
It also organizes their holidays and guarantees them the right to eat halal food.
According to media reports, the Vienna-based Turkish Islamic Union plans to challenge the law at the Austrian Constitutional Court, on the basis that some articles target Muslims from among other religious organizations in the country.
Most of Austria's half a million Muslims are the families of Turkish migrant workers, forming about 6 percent of the population. Their imams are sent and financed by Turkey.