Kammala wannan jumla: A shekara ta 1866, Austriya ta yi rashin nasara a yaƙin da ta yi da Prussia da kuma wasu jihohin Italiya. An bukaci Francis Joseph I don magance matsalolin da ke cikin mulkinsa kuma an shawarce shi da kyau don samar da babban ci gaba ga masu daraja na Hungary, wanda ya kasance a cikin juriya mai ƙarfi a gare shi bayan da aka rushe
Juyin juya halin Hungary na 1848 da 1849. Ta hanyar Yarjejeniyar Austro-Hungarian ta 1867 ("Ausgleich"), Masarautar Hungary da Daular Austria a matsayin ƙungiyoyi biyu daban-daban sun haɗu tare a kan daidaito don samar da Daular Austriya-Hungary. Don haka tsoffin ƙasashen da Habsburg ke mulki an sake tsara su zuwa ƙungiyar biyu wacce ke da masarauta da rundunar soji, sojan ruwa da manufofin waje. Transylvania ya sake zama wani ɓangare na Hungary yayin da aka yarda da Croatia-Slavonia a matsayin wani ɓangare na ƙasashen Crown na Saint Stephen, wanda jami'an gwamnati suka kira Transleithania don bambanta su daga Cisleithania, ɓangaren Austrian na Daular daga 1867 zuwa gaba. An san waɗannan a cikin gudanarwar cikin gida a matsayin "Mulkokin da ƙasashe da aka wakilta a cikin Majalisar Imperial" ("Die im Reichsrat vertretenen Königreiche und Länder"). Ba bisa ƙa'ida ba tun daga wannan lokacin, waɗannan yankuna an kira su "Austria" daga 1915 zuwa 1918 kawai, duk da cewa duk 'yan ƙasa suna riƙe da ɗan ƙasa na Austriya tun daga 1867.