Austria's Chancellor Sebastian Kurz on Saturday announced he was resigning from the country’s top post as the opposition stepped up pressure on him to quit after his name figured in a corruption scandal.

Kurz, who in 2017 became the world's youngest democratically elected leader, announced his resignation on television saying he wanted to "make space to prevent chaos".

Kurz and nine others were placed under investigation after raids at a number of locations linked to his conservative ÖVP People's Party.

The corruption allegations relate to the period between 2016 and 2018, when finance ministry funds were suspected to have been used to manipulate opinion polls in favour of the ÖVP that were then published in a newspaper.

Kurz denies claims he used government money to ensure positive coverage in a tabloid newspaper.

The allegations this week took his coalition government to the brink of collapse after its junior partner, the Greens, said Kurz was no longer fit to be chancellor.

The Greens began talks with opposition parties, who were threatening to bring a vote of no-confidence against the chancellor next week.

"We need stability. It would be irresponsible to allow Austria to slide into months of chaos or gridlock while the country fights the pandemic,” he was cited as saying.

His resignation brings to an end a spectacular rise in politics and a tumultuous four years as chancellor, in which his government already collapsed once.