Goals in each half from Marcel Sabitzer and Christoph Baumgartner, along with Sane’s red after making contact with the face of Austrian defender Phillipp Mwene, compounded a poor night for Julian Nagelsmann’s men in the friendly.
The red card, Sane’s first in a professional football career spanning more than 400 games, meant Germany were forced to play catch-up for most of the second-half with a man down.
“I think the red card for Leroy just sums it all up: the frustration, the disappointment,” Germany captain Ilkay Gundogan told TV network ZDF.
“At the end we made it far, far too easy for the Austrians to create and score goals. We were simply not good enough.”
Nagelsmann said his side could turn things around “only with extremely hard work.”
Austria forward Michael Gregoritsch described the victory as “extremely nice, extremely sweet… it was a nice conclusion to the season”.
The visitors have now won just three of 11 matches in 2023, a run which claimed the scalp of former coach Hansi Flick, the first manager sacked in Germany history.
Austria have now won seven and lost just one of their ten matches in 2023 while qualifying for Euro 2024, continuing an impressive run under former Manchester United coach Ralf Rangnick.
Rangnick praised his troops, saying “I told them before the game to be courageous, play with pleasure and enjoy the game — and they did all three.”
With eight of Austria’s starting XI playing in the German Bundesliga, the home side refused to be awed by their decorated neighbours, cutting gaping holes in the visitors’ backline from the opening whistle.
Freiburg striker Gregoritsch should have scored when through one-on-one with ‘keeper Kevin Trapp after 17 minutes but the Frankfurt goalie managed to get an outstretched hand onto the shot.
Austria hit the lead shortly after when the towering 1.93-metre Gregoritsch plucked a ball out of the air and fed it to Baumgartner, who put Sabitzer in space.
The Dortmund midfielder was given time as the German defence held off, allowing him to drive a low shot into the bottom corner.
The goal meant the once miserly German defence have now kept just one clean sheet in their past 14 matches dating back to the start of the Qatar World Cup in 2022.
Nagelsmann brought on striker Niclas Fuellkrug for veteran Thomas Mueller at half-time but things got worse immediately after the break, Sane given his marching orders four minutes in.
Sane, who narrowly avoided a yellow card for a cynical foul late in the first half, brought down Mwene from behind.
With the Austrian defender standing over him, Sane rose to his feet and grabbed Mwene by the face, forcing him to the ground.
The referee produced a red card immediately, after which a visibly enraged Sane was escorted from the field by a member of Germany staff.
Nagelsmann said after the match Sane “knows he can’t do that, he’s already apologised.”
Germany rolled the dice, making a raft of changes with 30 minutes to go but Austria struck next, Gregoritsch laying on a clever pass for Baumgartner, who chipped Trapp to seal the win.
The loss is just Germany’s third in 29 encounters with their neighbours since the teams’ semi-final clash at the 1954 World Cup.