Austria's Chancellor Sebastian Kurz on Saturday announced he was stepping down as chancellor following pressure on him to resign after he was implicated in a corruption scandal.

In a televised media statement, Kurz said he wanted to "make space to prevent chaos."

"We need stability," the 35-year-old conservative said, adding it would be "irresponsible" to allow Austria to "slide into months of chaos or gridlock" while the EU member fights the pandemic.

Kurz said he would nominate Foreign Minister Alexander Schallenberg as the new chancellor, while he would stay on as the leader of his People's Party (OVP) and a lawmaker in Parliament.

Vice Chancellor and Greens leader Werner Kogler on Friday had asked the OVP to name another chancellor, saying Kurz was "no longer fit for office."

On Wednesday prosecutors raided several locations linked to the OVP and announced that Kurz and nine other individuals were under investigation over claims that government money was used in a corrupt deal to ensure positive media coverage.

Kurz has denied any wrongdoing, reiterating on Saturday that allegations against him were "false."

"I will be able to clarify it; I'm sure about that," he said calmly.

He said some of the text messages he wrote that got him into hot water were composed in "the heat of the moment."

"I'm just human with emotions and mistakes," he said.

By stepping down, Kurz avoids having to face a parliamentary no-confidence motion, which he was expected to lose after his junior coalition partner, the Greens, turned against him.

In 2019, his coalition with the far-right Freedom Party (FPOe) already collapsed after his ally became engulfed in a corruption scandal, but fresh elections once again saw Kurz's OVP come out on top.

In the latest scandal, according to prosecutors, the core allegation is that between 2016 and 2018, Finance Ministry resources were used to finance "partially manipulated opinion polls that served an exclusively party political interest."

This correlates to the time period in which Kurz, already a government minister, took over the leadership of the OVP and later that of the Alpine EU member at the helm of a coalition with the FPOe.

Prosecutors allege that payments were made to an unnamed media company – widely understood to be the Oesterreich tabloid – in return for publishing these surveys.

The OVP-Green coalition – a first at a national level – entered office in January 2020 and has already been put under strain several times by the fallout from other corruption scandals and differences over questions such as refugee policy.

Thousands demonstrated in front of the OVP headquarters in central Vienna late on Thursday, calling for Kurz's resignation while waving signs that read "Against corruption" and "Shame on you."