Hungary on Wednesday reversed its decision to suspend a key EU rule on the processing of asylum claims, a day after announcing the move.
"(Foreign) Minister Peter Szijjarto has informed his Austrian counterpart that Hungary was not suspending any rule of the European Union," the foreign affairs ministry said in a statement.
The government said it had merely requested a period of grace from fellow EU member states to help deal with the tens of thousands of refugees arriving in the country.
The right-wing government of Prime Minister Viktor Orban had caught Brussels by surprise on Tuesday when it announced it was indefinitely opting out of the so-called Dublin III regulation because of "technical reasons".
The provision requires a migrant's claim to be processed in the EU country they first arrive in.
Budapest said it had been forced to take the step to "protect Hungary's interests and population" in light of the tens of thousands of refugees who had arrived over the past year.
"The boat is full," government spokesman Zoltan Kovacs had told Austrian media.
The move, which came ahead of a key EU summit on the immigration crisis on Thursday, prompted Brussels to demand "immediate clarification".
It had also drawn strong criticism from neighbouring Austria, which called the decision "unacceptable" and warned of "negative consequences".
Hungary has become a major transit country for refugees attempting to reach wealthy Western countries like Austria and Germany by land rather than sea.
The nation received more asylum-seekers per capita than any other EU country apart from Sweden in 2014, up to nearly 43,000 from just 2,000 in 2012.
This year, more than 50,000 migrants tried to cross into Hungary via Serbia between January 1 and 31 May -- representing an 880 percent increase compared to the same period in 2014, according to new figures by the EU's Frontex border agency.
A majority come from Syria, Afghanistan and Iraq, but also from Kosovo.
But human rights groups rejected the argument put forward by Hungary that it could no longer cope with the amount of asylum claims returned to Budapest under the Dublin III rule.
"Of the 3,000 refugees that came to Germany from Hungary in 2014, Berlin only sent back 42 under the Dublin III agreement," said the Helsinki Committee for Human Rights.
Orban, who has a record of spats with Brussels, has also been among the harshest critics of EU plans to manage the upsurge in migrant numbers by spreading the burden around the 28-nation bloc.
The quota proposal is at the heart of an increasingly heated debate between EU member states over how to best tackle the migrant crisis.