In 1894 Wagner was appointed professor of architecture at the Vienna Academy of Fine Arts, replacing Carl von Hasenauer, and Wagner held that position until 1913. In his remarkable inaugural lecture, Wagner, who was already in his fifties, declared himself absolutely and without reservation in favor of a modern architecture in response to modern needs and condemned all stylistic imitation as false and inappropriate. This inaugural lecture, which epitomized Wagner's philosophy of architecture and design, was published in the following year as a book under the title Moderne Architektur. Shortly thereafter this book was made available to the American public by N. Clifford Ricker, who translated it and published it first in serialized form in 1901 in the Brickbuilder and in the following year as a book.
The functionalist message that Wagner set forth was that "Modern art must yield for us modern ideas, forms created for us, which represent our abilities, our acts, and our preferences" and that "Objects resulting from modern views … harmonize perfectly with our surroundings, but copied and imitated objects never do." Moreover, Wagner repeated verbatim the famous functionalist principle advocated by the great German architect Gottfried Semper: "Necessity is the sole mistress of art," to which he subsequently added his own emphasis on structure and materials.
Wagner's outspoken, strongly rationalist functionalism was indeed more revolutionary than his architecture. In 1894 he was commissioned to design the stations of the elevated and underground railroad (Stadtbahn) of Vienna. The stations that he designed at the start were in a rather conventional historicist mode. This, however, changed drastically in later stations, presumably under the influence of his pupils Josef Hoffmann and Josef Maria Olbrich, both of whom worked for him for several years. Thus in the later stations, such as the Hofpavillon in Schönbrunn and the Karlsplatz Station, Wagner used the historicist formal vocabulary in a freer and more innovative manner. In his blocks of flats in Vienna, such as Linke Wienzeile 38 and 40 of 1898, Wagner adorned the facades, which were essentially inspired from Renaissance palace architecture, with bold flat ornament, purely Art Nouveau in character. In that year Wagner joined the Vienna Secession, remaining a member until 1905.
After the turn of the century, Wagner started throwing off the Art Nouveau influence. His work in the new mode culminated in Sankt Leopold, the church of the Steinhof Asylum in Penzing outside Vienna, built in 1904-1907. This was a large cruciform edifice with a hemispherical dome raised on a cylindrical drum. There was abundant decoration, but this had been submitted to a linear stylization and was kept within rectangles and squares. Although remotely Byzantinesque in character, it appeared nonhistoricist and very much in the spirit of the work of younger architects such as Josef Maria Olbrich and Peter Behrens. Wagner's masterpiece of the time was the Postal Savings Bank in Vienna of 1904-1906, a work characterized by linearity, smoothness, and crispness of design. The external walls were covered by marble revetments held in place by exposed aluminum fastenings. The interior, equally striking in its lightness and in the elegant use of exposed metal and glass, secured Wagner a place among the 20th-century pioneers. Wagner died in Vienna on April 11, 1918.
Through his 1894 lecture, which was published as a book in numerous editions, Wagner facilitated greatly the reform of architectural practice and the establishment of modern design principles, such as honest use of materials, especially steel; rejection of historicist formal vocabulary; and preference for simplicity and clarity of form. His own work remained tied to tradition much longer, although it became increasingly modern after the turn of the century. Among his works, the Vienna railroad with its stations and the Postal Savings Bank provided exemplary solutions to contemporary and relatively new architectural problems. His theories and teachings, on the other hand, exercised a broad and fruitful influence and found their full realization in the work of subsequent generations.