Austrian Vice-Chancellor and leader of the right-wing populist Freedom Party Heinz-Christian Strache on Saturday declared his resignation over a scandal in which he appears on video offering government contracts in exchange for political support.

He offered Chancellor Sebastian Kurz his resignation and Kurz accepted it, Strache told a press conference.

Austria's Vice-Chancellor Heinz Christian Strache of the Austrian Freedom Party (FPOe) gives a statement to journalists in the Ministry of Public Service and Sport in Vienna, Austria, 18 May 2019. [Photo: IC]

Transport Minister Norbert Hofer will take over the leadership of Freedom Party, he said.

The secretly-filmed footage was first revealed by German news outlets the Sueddeutsche Zeitung and Der Spiegel on Friday, showing Strache and his long-time party colleague and MP Johann Gudenus speaking to individuals purportedly representing a Russian oligarch.

In the more than seven hours of footage, a woman posing as the niece of the billionaire oligarch expresses a wish to purchase Austria's most-read daily newspaper the Kronen Zeitung, and use it to provide political support to Strache's Freedom Party.

Strache in turn states that many possibilities would be made available if this were to occur, such as the provision of construction contracts.

The informal meeting took place on the resort island of Ibiza in 2017, shortly before the federal election that year.

Despite Strache and his party insisting that no funds exchanged hands and that it was clearly expressed that laws and regulations would have to be followed, local media reported on murmurs from within political circles that Strache's position is untenable and his resignation inevitable.