The country's Interior Ministry will gain access to Microsoft's XP operating system under the Shared Source Initiative. The "unabridged" code will be made available, on Microsoft's own initiative, said spokesman Thomas Lutz of Microsoft Austria.
"We already have a very good relationship with the Interior Ministry, because there are always criminal inspectors coming to us who need to inspect, for example, [the company's Internet service] MSN while trying to track down child pornography," he said.
Microsoft said the Shared Source Initiative is intended to reassure citizens about security concerns in using the company's products.
"It's not so much about NSA backdoors," said Lutz, referring to widely circulated reports that the US National Security Agency (NSA) had built secret access into Microsoft software, "but rather about closely examining critical routines that could be misused by hackers."
Government agencies also need access to source code to improve the performance of their own applications and check the security of sensitive databases, he added.
Microsoft offers source code to large business customers for the same reason. US financial services company Salomon Smith Barney, for example, has been granted source code access in order to check the security of its online stock trading functions.
Microsoft may face a cool reception from other European countries on the source code offer. The French government has issued an order encouraging the use of open source software whenever possible for electronic government applications. And Germany's Bundestag, the lower house of parliament, is currently considering whether to drop Windows in favour of Linux for its own machines.
"The whole discussion in Germany is very overheated. Here in Austria it's much more objective," said Lutz. "[In Germany] it's a kind of religious war with open source as a confession of faith, and attitudes like anti-Americanism and against the commercial software business.
"In my view it's not the job of the government to declare conditions for commercial software development," he added.
In Germany, concerns over security led the government last year to question Microsoft about a Windows 2000 disk defragmenting routine developed by a company with links to the Church of Scientology. The company eventually bowed to pressure and released instructions for removing the routine.
Media reports also said the German military was eliminating Microsoft software from computers in "sensitive" installations, although a German defence ministry spokesman later denied it.