The action is an early ripple effect of US President Donald Trump's effort to clamp down on refugee admissions.
Under a 27-year-old program originally approved by Congress to help Jews in the former Soviet Union, Austria had been serving until recently as a conduit for Iranian Jews, Christians and Baha'i, who were at risk in their home country and eligible to resettle in the United States.
Iran has banned the Baha'i religion, which was founded in 1844 by a Persian nobleman considered a prophet by followers.
The episode isn't directly linked to an executive order Trump is expected to sign, perhaps as soon as today, that would suspend the far broader US refugee program for four months.
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But it reflects that knock-on effects already occurring from his tougher line on immigration and refugees. Similar to how tighter German migration rules had consequences across Europe, Trump's actions could lead other nations to take a harder look at people wishing to use their territories as transit points.
Austrian Foreign Ministry spokesman Thomas Schnoell said the Alpine country acted after "US authorities told us that the onward trip for people to the USA, who received visas from Austrian authorities as part of the program, would be put on hold for now."
A State Department email sent Tuesday said the Austrian government had "electronically canceled" its visas for applicants who hadn't yet reached Austria. If they try to reach Austria anyway, they will be permanently blocked from Austria, according to the email, which was obtained by AP.
The search continues for the rest through airline ticket bookings and other means, Schnoell said.
Other officials said a small number of Iranians with such short-term visas already were in Austria. It wasn't immediately clear what would happen with them.
The end of the program, named for former Sen. Frank Lautenberg of New Jersey, could have broad implications for religious minorities in Iran.