The end of the occupation of Austria had its genesis in post-Stalinist turn in Soviet diplomacy and it gelled well with both the new direction for foreign policy of the emerging Thaw and the security needs of the USSR.

From the end of the war up to 1955, Austria was an occupied nation much like Germany- divided up between American, French, British, and Soviet zones. Unlike Germany, there was a negotiated end to the military occupation in 1955 with the ratification of the Austrian State Treaty. The Austrian state pledged neutrality in European affairs, would not host foreign military bases, and would never seek a reunion with Germany. The Soviets agreed to these conditions because it ended an occupation that was a drain on the Warsaw Pact's defenses and publicly signaled a new turn in Soviet foreign policy after Stalin. More cynically, demilitarizing Austria also created something of a gap in NATO's continental-wide front via a neutral Swiss-Austrian gap that bisected NATO's northern and southern theaters.

Many in the US State Department saw the Austrian State Treaty as Austria undertaking a voluntary decision to become another Switzerland. There was little concern of "Finlandization" in which a peace treaty with the Soviets also carried certain defense obligations. The policies of subsequent Austrian governments bore out this as they hewed to a generally pro-Western foreign policy. One problem that the Treaty also solved for both blocs was that Austria, and especially Vienna, was not geographically suited for military division as Germany. Unlike Berlin, officers from the four powers patrolled Vienna together and this was a cumbersome military situation. So the Treaty had a practical effect of eliminating what had become a clumsy arrangement.

The Western influence of the Cold War upon Austria was largely cultural. Austria's borders to the West were open, those to the Eastern bloc were, for the most part, not. Western products, tourists, and other connections integrated Austria into the West, even if it could not join the various Western defensive alliance systems. Therefore, Austria emerged as something of an anomaly during the Cold War, culturally and economically connected to the West, but politically restrained by the Treaty from joining either Superpower bloc.

Like Germany, the Allies jointly occupied Austria after the war. In 1955, the Allies agreed to pull out of Austria on the condition that Austria would be neutral in the Cold War.