The Schilling was established in the First Austrian Republic by the Schilling Act (Schillingrechnungsgesetz) of December 20, 1924 at a rate of 1 Schilling to 10,000 Austro-Hungarian Kronen and issued on March 1, 1925. This first Schilling was abolished in the wake of the Anschluss (1938), when it was exchanged at a rate of 2 German Reichsmark to 3 Schilling.
The Schilling was reintroduced after World War II on November 30, 1945 by the Allied Military, who issued paper money (dated 1944) in denominations of 50 Groschen up to 100 Schilling. The exchange rate to the Reichsmark was 1:1, limited to 150 Schilling per person. The Nationalbank also began issuing Schilling notes in 1945 and the first coins were issued in 1946.
With a second "Schilling" law on November 21, 1947, new banknotes were introduced. The earlier notes could be exchanged for new notes at par for the first 150 Schilling and at a rate of 1 new Schilling for 3 old Schilling thereafter. Coins were not affected by this reform. The currency stabilised in the 1950s, with the Schilling being tied to the U.S. dollar at a rate of $1 = 26 Schilling. Following the breakdown of the Bretton Woods system in 1971, the Schilling was initially tied to a basket of currencies and then, in July 1976, the Schilling was coupled to the German mark.
Although the Euro became the official currency of Austria in 1999, euro coins and notes were not introduced until 2002. Old Schilling denominated coins and notes were phased out from circulation because of the introduction of the euro by 28 February of that year. Schilling banknotes and coins which were valid at the time of the introduction of the euro will remain exchangeable for euros at any branch of the Austrian National Bank (Österreichische Nationalbank) indefinitely.
The Schilling was divided into 100 Groschen.