"We act decisively and actively against undesirable developments and the formation of parallel societies - and will continue to do so if there are violations of the law on Islam", Kurz said in a tweet.
Austria's right-wing Government plans to shut down seven mosques and expel up to 40 imams in what it says is "just the beginning" of a push against Islamist ideology and foreign funding of religious groups.
"Austria's decision to close down seven mosques and deport imams with a lame excuse is a reflection of the anti-Islam, racist and discriminatory populist wave in this country", Ibrahim Kalin said after Vienna announced the move in a crackdown on "political Islam".
"The aim is to marginalize the Muslim communities and gain political benefits", Kalın wrote on his Twitter account.
Interior Minister Herbert Kickl said the residence permits of around 40 imams employed by ATIB, a group that oversees Turkish mosques in Austria, are being reviewed because of concerns about such financing.
Kurz, who leads the center-right People's Party, became chancellor in December in a coalition with the anti-migration and far-right Freedom Party.
He went on to blame Vienna for "ideologically charged practices" that violate human rights, adding that the "efforts to normalize Islamophobia and racism must be rejected under all circumstances". The photos depicted boys wearing military uniforms, marching, saluting and carrying Turkish flags in a reenactment of the 1915-16 battle of Gallipoli, which saw the defeat of the allied forces by the Turks during World War I.
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The mosque in question was run by ATIB.
In several cases the process of expelling imams connected to the Turkish-Islamic Cultural Associations (ATIB) organisation was underway, Mr Kickl said.
Their "corpses" were then lined up and draped in the flags.
Standing next to him and two other cabinet members on Friday, far-right Vice Chancellor Heinz-Christian Strache told a news conference: "This is just the beginning".
During the Turkish referendum campaign past year on expanding the president's powers, tensions were high between Vienna and Ankara after Austria said it would not allow campaign-related events.
Turkey's relations with Austria have always been strained, with Kurz calling on the European Union to break off negotiations on Ankara joining the bloc.
Last week Turkish President Recep Tayyip Erdogan attacked Mr Kurz, saying: "This immoral chancellor has a problem with us".