Many voters complained that postal ballots were coming unstuck, Interior Ministry spokesman Alexander Marakovits told CNN, adding that the issue could jeopardize the results of the scheduled October 2 election.
The government has now put forward a proposal to delay the vote until December 4, which will first need to be approved by Austria's parliament. A final decision is expected this week.
A new company has been asked to print the postal ballot forms, Marakovits said.
It's not the first time the election results could be delayed.
The election was originally held in May, with left-wing candidate Alexander Van der Bellen defeating right-wing presidential hopeful Norbert Hofer in a tightly fought contest decided by mail-in votes.
Van der Bellen won 50.3% of the ballot (2,254,484 votes) to Hofer's 49.7% (2,223,458 votes), the Austrian Interior Ministry announced after the poll.
The result meant Van der Bellen would have been the nation's first left-wing president since World War II.
But Hofer's Freedom Party challenged the results in court, claiming that some of the postal votes in various districts had been carried out illegally. The court found there had been some irregularities and ordered the vote be repeated "completely and throughout Austria," according to a court statement.
The court added that the number of votes considered irregular was high enough to have affected the outcome of the vote.
Who's in the running?
Left-wing Van der Bellen, a 72-year-old economist, ran as an independent, although the Green Party he formerly led financially backed his campaign.
Meanwhile Hofer, if elected, would become the European Union's first far-right head of state. His party has risen on a populist groundswell sweeping the continent caused by the European Union's failure to make progress in the ongoing economic and migrant crises.
Europe's migrant crisis featured heavily in the campaign period. While Hofer's Freedom Party stood strongly against migration, Van der Bellen -- whose parents spent time in a refugee camp before settling in Austria -- championed liberal migration policies.
Austria followed Germany in opening its doors to thousands of refugees who had been trapped in their attempts to transit through Hungary, a country widely criticized for its hard-line stance in defending its borders.