The election was due to take place on October 2 but postal ballots were flawed leading to an indefinite postponement, Efe news reported.
Many ballot envelopes had faulty glue which would not seal properly, thus rendering the votes invalid.
Interior Minister Wolfgang Sobotka said he hoped the election could be held before the start of 2017 and mentioned November 27 and December 4 as potential dates.
The new date for the election was now up to the political parties, who must reform electoral laws, said Sobotka.
He recognised that this situation damaged the country's public image, but insisted that it was a technical problem that affected the election.
In the first attempt at an election on May 22, Green candidate Alexander van der Bellen won against right-wing Norbert Hofer by a slim margin.
But Hofer and his party, the ultra-nationalist FP?, claimed there were irregularities in the postal vote recount.
The Austrian Constitutional Court decided in July that though there was no evidence of vote manipulation, the rules of the recount had not been fully respected and the election had to be held again.
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