He secured the second pole position of his career with a solid lap of the Red Bull Ring, which also set a new qualifying lap record by over two seconds.
Bottas clinched pole after qualifying on Saturday, ahead of Ferrari's Vettel, while Hamilton was third fastest but will start the race from eighth due to a penalty for a gearbox change. This year, Vettel is first in the point standings.
He added: "The auto was good but it was a bit messy, qualifying, but I'm happy to start third and i think the vehicle is fine".
The three-time world champion, who is 14 points behind championship leader Sebastian Vettel of Ferrari in the title race, topped both sessions with aplomb. That means Ferrari's Kimi Raikkonen moves up from fourth to third.
Hamilton was braking for Turn 3 - the uphill right hander previously numbered as Turn 2 - when his front right brake appeared to fail, resulting in the Briton locking the front left heavily and running straight on. We didn't touch auto at all throughout the three qualifying sessions, and the laps kept getting better and better.
A grid penalty denies Lewis Hamilton Austria pole.
Mercedes has dismissed suggestions that the damage that Lewis Hamilton's gearbox suffered at the Azerbaijan Grand Prix was caused by the impact he took from Sebastian Vettel in the race, according to Motorsport.
Former F1 driver Damon Hill said he could understand Hamilton's reluctance to be forced into a public display with his main rival. But he is not confident of a repeat performance.
Vettel had to make a public apology after accusing his rival of "brake-testing" him after the Ferrari driver drove into the back of the Mercedes and then banged wheels while they were behind the safety vehicle.
"Mexico was a completely different offence, and we have seen Sebastian is not always able to control himself as much as we should - I used to run drivers and they are in a very tense situation - and I think you must try to interpret the situation well".
This will make it hard for Redbull to get their cars onto the podium. The vehicle was good and Valtteri did a fantastic job today so I'm really happy for him but I just didn't hook it up.style="text-align: center;"