The UK government plans to finance the EDF Energy-developed reactor through subsidies amounting to €130 for each megawatt-hour of power generated over a period of 35 years - an amount which is twice the current market price for electricity.
The subsidies - which Austria considers to be competition distorting, illegal state aid - are to be funded through levies on consumer bills. Austria has no nuclear power plants itself and plans to file the case on Monday in what chancellor Werner Faymann said "is also of symbolic value against nuclear power".
UK Greens MEP Molly Scott Cato welcomed the move, saying, "The Austrian government recognises that the European commission is in breach of its own rules on state aid and this cannot be left unchallenged.
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"This deal would waste vast sums of public money on a dated and dangerous technology, when we should instead be promoting a safe and sustainable energy future for Europe.
"The south west of England has some of the best renewable energy resources in Europe, and the region is capable of producing in excess of 100 per cent of its energy needs through renewables alone, creating around 122,000 jobs in the process.
"Yet the focus on Hinkley means spare grid capacity is being earmarked for nuclear. This is undermining the ability of renewable energy companies to develop alternative sources of electricity generation by denying them access to the grid capacity they require."
Greens / European Free Alliance group co-president Rebecca Harms also praised Austria's decision to refer the case to the courts, saying, the "commission has no right to be meddling on the European energy market through the use of such funds. Subsidies for nuclear zombies such as the French Areva group are economically absurd and dangerous.
"Without generous amounts of state aid, the high-security technology of the atom is no longer viable. The nuclear industry is clearly losing out to competition from renewable energy sources. Already today, wind and solar power are far cheaper than nuclear power.
"The EU's energy transition can only be possible if we promote renewables and energy efficiency rather than backing an outdated and dangerous technology," she concluded.
A spokesperson for the UK government's department of energy and climate change said, "We are confident that the European commission's state aid decision on Hinkley point C is legally robust and have no reason to believe that Austria will submit a challenge of any merit."