Mr Gusenbauer's popularity has suffered recently in the polls
Austria is to face a snap general election after the leader of the Austrian People's Party said he was pulling out of the governing coalition.
Wilhelm Molterer, who is also finance minister, said he could no longer work alongside the Social Democrats Party.
The two main parties, often at odds on policy issues, have been part of a grand coalition since January 2007.
Chancellor Alfred Gusenbauer said he would not stand for re-election in the poll, likely to be held mid-September.
Analysts suggest that with current popularity ratings neither party would be able to govern single-handedly and would probably have to form a coalition with the far-right Freedom Party.
Mr Molterer said the Social Democrats Party was "without orientation or leadership".
"Enough is enough. Good work in this government is no longer possible. We can't let the Social Democrats crisis become an Austrian crisis," Mr Molterer said.
"I therefore recommend immediate, prompt new elections."
The two parties formed an uneasy coalition in January 2007 and have since clashed on issues including health, taxes, pensions and schools.
Mr Gusenbauer - whose popularity in the polls has plummeted - said Social Democrats chief Werner Faymann should be the main candidate.
Within his own party, Mr Gusenbauer has been accused of being weak and without a sense of direction, allowing control of major ministries to the conservatives.