Did you try to enclose your parameter variables in quotes (“)?

E.g.:

-DecryptBackups -DecryptionKey “$key”

I am definitely no AWS-expert, but it seems these parameters (-DecryptBackups -DecryptionKey) doesn't exist for Add-VBRAmazonS3Repository 

https://helpcenter.veeam.com/docs/backup/powershell/add-vbramazons3repository.html?ver=110

@chandrasinghe did you take the command from here?

Set-VBRAzureExternalRepository -ExternalRepository $repository -DecryptBackups -DecryptionKey $key

https://helpcenter.veeam.com/docs/backup/powershell/set-vbrazureexternalrepository.html?ver=110

because as @vNote42 said, maybe those parameters doesn’t exist for AWS.

do we need put variables inside quotes.

I got it from here : https://helpcenter.veeam.com/docs/backup/powershell/add-vbramazons3externalrepository.html?zoom_highlight=decryptbackups&ver=110

Finally I was able to automate VM recovery via PowerShell except for credentials. 

Add backup repository to Veeam

$account = Get-VBRAmazonAccount -AccessKey "xxxxxxxxxxx"
$connect = Connect-VBRAmazonS3Service -Account $account -RegionType Global -ServiceType CapacityTier
$bucket = Get-VBRAmazonS3Bucket -Connection $connect -Name "veeam-backup"
$folder = Get-VBRAmazonS3Folder -Name "s3-folder-name" -Bucket $bucket -Connection $connect
$securepassword = Read-Host -Prompt "Enter password" -AsSecureString
$key = Add-VBREncryptionKey -Password $securepassword
Add-VBRAmazonS3Repository -Name "AmazonS3Repository" -Connection $connect -AmazonS3Folder $folder

Import Backup from S3 repository

$repository = Get-VBRObjectStorageRepository -Name "AmazonS3Repository"
$securepassword = Read-Host -Prompt "Enter password" -AsSecureString
$key = Add-VBREncryptionKey -Password $securepassword
Mount-VBRObjectStorageRepository -Repository $repository -EncryptionKey $key

Decrypt backup Jobs (Specify password)
$encryptedbackup = Get-VBRImportedEncryptedBackup -Name "backup-job" Get-VBRImportedEncryptedBackupHint -Backup $encryptedbackup Set-VBREncryptedBackupPassword -Backup $encryptedbackup -Password "xxxxxxxxxxxxx"

Setup aws credentials$creds = Get-VBRAmazonAccount -AccessKey "xxxxxxxxxx"
Set-VBRAmazonAccount -Account $creds -SecretKey "xxxxxxxxxxxxxxxxxxx"

Restore VM to AWS Ec2

$restorepoint = Get-VBRBackup -Name  "backup-job" | Get-VBRRestorePoint -Name "INF-VM" | Sort-Object –Property CreationTime –Descending | Select-Object -First 1

$account = Get-VBRAmazonAccount -Id "xxxxxxxxxxxxxxxxxx"

$region = Get-VBRAmazonEC2Region -Account $account -RegionType Global -Name "region-name"

$config = New-VBRAmazonEC2DiskConfiguration -DiskName "INF-VM-flat.vmdk" -Include -DiskType GeneralPurposeSSD

$instance = Get-VBRAmazonEC2InstanceType -Region $region -Name "ec2-type"

$vpc = Get-VBRAmazonEC2VPC -Region $region

$sgroup = Get-VBRAmazonEC2SecurityGroup -VPC $vpc -Name "security-group-name"

$subnet = Get-VBRAmazonEC2Subnet -VPC $vpc -Name "x.x.x.x/xx"

Start-VBRVMRestoreToAmazon -RestorePoint $restorepoint -Region $region -LicenseType  BYOL -InstanceType $instance -VMName "Restored VM" -DiskConfiguration $config -VPC $vpc -SecurityGroup $sgroup -Subnet $subnet -Reason "Data recovery"
 

its a different cmdlet. You use Add-VBRAmazonS3Repository in your script.

Thanks for sharing your solution!