Francesco III d'Este, Duke of Modena

Given that in the Este States the Salic law was in force which prohibited women from succeeding to the throne, after the premature death of his fourth son Benedetto Filippo (though directed to an ecclesiastical career) in 1751 and, two years later, that of his only grandson in the male line, Rinaldo Francesco, just aged 4 months, the duke had to surrender to the idea that extinction was looming large over the house of Este. Maria Beatrice was now the sole surviving child of his sole surviving son, Ercole Rinaldo (the future Duke Ercole III), and it was clear that the latter would not father any more legitimate offspring because he and his wife, Maria Teresa Cybo-Malaspina, were now irretrievably separated.

Therefore, Francesco III set out to prevent his ancient Este States, as imperial fiefs, from being declared "vacant" (heirless) in future and then simply absorbed by the Empire, just as, almost two centuries earlier, Ferrara, a papal fief held to be vacant by Pope Clement VIII, had been confiscated by the Apostolic Chamber. Previously he had already turned to the court of Great Britain for advice and help: King George II was a distant maternal cousin of his and Francesco looked to him as a sort of head of the family given the shared ancestral origins of the two dynasties from the House of Welf. Thus, in the same year 1753, with the mediation and guarantee of George II, two simultaneous treaties (one public and one secret) were concluded between the House of Este and the House of Austria. In virtue of them, Archduke Leopold of Habsburg-Lorraine, Empress Maria Theresa's ninth-born child and third son, and three-year-old Maria Beatrice d'Este were engaged, being entrusted with the lofty task of setting up a new ruling house that would bring together the names of both their families. The treaties also stipulated that Leopold should be designated by Francesco III as heir for the imperial investiture as Duke of Modena and Reggio in the event of extinction of the Este male line. It was intended that the new house should rule the Este States as a separate entity from the other Habsburg domains. In the meantime, Francesco would cover the office of governor of Milan ad interim, which was destined for the archduke.

In 1761, however, following the death of an older brother of his, Leopold moved up one place in the line of succession, becoming heir to the throne of the Grand Duchy of Tuscany as provided for the second son of the imperial couple, and even taking over from his late brother as betrothed to the Infanta Maria Luisa of Spain; whereupon the 1753 treaties evidently became anachronistic and had to be revised. In 1763, despite the harsh opposition of Ercole Rinaldo, the two families agreed to simply replace the name of Leopold with that of his next junior brother, Archduke Ferdinand Karl of Habsburg-Lorraine, who had not yet been born at the time of the signing of the treaties and was four years younger than his betrothed. In January 1771 the Perpetual Diet of Regensburg ratified Ferdinand's future investiture and, in October, Maria Beatrice and he finally got married in Milan, thus giving rise to the new House of Austria-Este. Francesco III ceded to the archduke the post of governor of Milan and the new archducal couple settled in the Lombard capital where they lived the next about 25 years producing a large offspring of ten children. In 1815, their son Francesco IV would be placed at the head of the restored Duchy of Modena and Reggio by the Congress of Vienna.