"We are talking here about an ordered inflow and not a barrier," Austrian Chancellor Werner Faymann's chief of staff, Josef Ostermayer, told reporters in Vienna.
The move came a day after European Union President Donald Tusk warned that Schengen — one of the bloc's most important achievements — was on the brink of collapse as a result of fallout from the migration crisis.
Austria's decision is the latest in a series of tough measures taken by countries to tackle the continent's worst refugee crisis since World War II.
Germany, which expects up to one million arrivals this year, said on Friday it would extend temporary border controls implemented in September until mid-February.
Earlier this week, Sweden — another preferred destination for refugees — also reinstated temporary checks, while Slovenia rolled out razor wire along its frontier with non-Schengen member Croatia.
Fellow bloc member Hungary already sealed its southern border with razor wire last month, diverting the influx toward Slovenia, a small nation of two million people.
More than 800,000 migrants have landed on Europe's southern shores so far this year, the UN said on Friday, many fleeing conflict in Syria, Iraq and Afghanistan.
Austria's mesh fence either side of the Spielfeld border crossing point in the southern state of Styria will be seven feet high.
The government had initially planned to install a 15.5 mile fence but "our Slovenian colleagues have asked us to not do this immediately," said Mikl-Leitner.
"They have offered to increase border security measures by erecting a fence to create a safety corridor and to reinforce police patrols on the Slovenian side to prevent (unofficial) border crossings."
However Austrian authorities were ready to unfurl the entire 15.5 mile fence within 48 hours if Slovenia failed to control the influx, she stressed.
Both countries, which share a 200-mile border, have become a major transit route for hundreds of thousands of people heading through the Balkans bound for northern Europe this year.
Most travel on toward Germany but Austria still expects a record 95,000 asylum claims this year, making it one of the highest recipients on a per capita basis.
The fractious coalition government has also come under pressure because of growing support for the far-right Freedom Party, which is leading opinion polls.
Top EU officials have repeatedly expressed unease over individual countries fencing off their borders.
"Saving Schengen is a race against time and we are determined to win that race," Tusk said at the end of an EU-Africa summit in Malta on Thursday.
At the talks, EU leaders struck an aid-for-cooperation deal with African counterparts to help fight poverty and accelerate the repatriation of failed asylum-seekers from Europe.
The EU Commission also announced that a summit with Turkey would be held before the end of the year, aimed at obtaining Ankara's help to secure the bloc's external borders and resolve the migration crisis.
Turkey — which currently hosts 2.2 million refugees from war-torn Syria — has become the main transit point, from where the migrants set off on a short but dangerous sea journey to Greece and begin their arduous trek toward northern Europe.
The UN refugee agency UNHCR warned on Friday that the Greek island of Lesbos had become "the epicentre of the crisis", with thousands, including young children and new-born babies, forced to sleep outside.
Some 16,000 refugees and migrants are currently on the island, which still only has the capacity to accommodate 2,800 people at a time, UNHCR said.