Police said the incident happened at about 08:20 local time (07:20 BST) at a level crossing near Salzburg.
Manninger made 64 appearances for Arsenal between 1997 and 2002, winning the Premier League and FA Cup.
He won 33 caps for Austria and was part of the squad that featured at Euro 2008 in his home country.
“Alexander Manninger was an outstanding ambassador for Austrian football, both on and off the pitch,” said Austrian Football Association sporting director Peter Schottel.
“His professionalism, composure and reliability made him an integral part of his teams and the national team.
“His achievements deserve the utmost respect and will be unforgettable.”
Salzburg police said first responders used a defibrillator on Manninger, who was alone in the car, after he was freed from the vehicle, which was dragged along by the train, but could not resuscitate him.
Police also said that the train driver was unharmed.
Manninger began his career with hometown club Red Bull Salzburg and spent time with 14 teams across Europe, including Sienna, Juventus, Udinese and Augsburg.
