Finkenstein Castle was first mentioned in 1142. It was owned by the Dukes of Carinthia who gave it to their ministeriales, who called themselves after the castle von Finkenstein. In 1223 there was a dispute between Heinrich von Finkenstein and Bishop Henry of Bamberg, the owner of the nearby castle Federaun regarding the crossing of the river Gail. After the extinction of the Carinthian Finkensteins at the beginning of the 14th Century, the ownership was passed back to the Dukes of Carinthia, which had been the Habsburg since 1335. Emperor Maximilian I, Duke of Carinthia since 1493 gave the castle and the rule to his liegeman Sigismund von Dietrichstein, whose descendants held the castle still 1861. Since the end of the 18th century, it is no longer inhabited and decayed, only ruins remain.

The oldest parts of the castle are Romanesque. In the second half of the 16th century, was rebuilt in late Gothic style. At the beginning of this century, four gates were built in the High Castle. The 15 m high end wall of the former palace still stands today.

Today Finkenstein Castle Ruin is the backdrop of the Burgarena, an amphitheatre with 1150 seats mainly used for concerts.

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