Rosberg had jumped into the lead mid-way through the race, but had Hamilton closing gradually in on him in the closing stages, culminating in a dramatic final-lap clash as the world champion attacked. Rosberg had the inside line at Turn 2, but ran deep under braking and, as Hamilton turned in, the pair collided.
Rosberg said he was confident he had the advantage - and the right of the corner - as he was on the inside line.
"I'm gutted. That's sport sometimes, but unbelievable," Rosberg said. "I was sure to win, I lost in the last lap - pretty intense.
"We were battling, and I was struggling a bit with my brakes and tyres degrading, and that gave Lewis a chance.
"Nevertheless I was confident I could defend accordingly - I had the inside line. I went a bit deep into the corner but that's okay, I dictate, but I was very surprised Lewis turned in. I'm frustrated about losing the win like that - I was out front, felt great and was going to win the race."
Hamilton, however, downplayed the incident, saying he did not see the need for it to be blown out of proportion.
"I don’t feel it's controversial really," he said. "Nico made a mistake into T1, clipped the inside kerb and went wide and I got a good run. He blocked the inside, so I went to the only place I could on the outside, the racing line.
"He was in my blind spot so I went very wide, left him room, and as I started to turn he collided with me. My guys said he had something wrong with the brakes maybe.
"I came back onto the track as fast as I could and it was very close again. For me it was exciting. I don’t understand how I ended up being second, I guess the safety car brought it into that position, but I never gave up and pushed it all the way. I know I have incredible fans supporting me so did everything I could."
Rosberg must now visit the race stewards who will decide if he was guilty of causing the collision and also of failing to stop with seriously damaged car.
WATCH: Rosberg and Hamilton collide on the final lap in Austria
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