Sport Ireland has decided to suspend and withhold future funding to the Football Association of Ireland after it emerged the FAI is to reveal it failed to obey State funding rules.
The decision was taken at a meeting of the organisation's board today.
Sport Ireland said the FAI receives approximately €2.9m in Exchequer funding per year.
In making the decision, the board of Sport Ireland said it notes that the association has already been paid 50% of its 2019 funding to date.
In a statement, it also said it notes some of the positive steps taken by the FAI in recent days.
The board of the FAI responded by saying it is unfortunate that Sport Ireland feels compelled to take this action in the wake of recent events.
Sport Ireland said the decision will be reviewed at each of its future board meetings.
It added that the board will consider the reinstatement of funding once all ongoing reports commissioned by the FAI have been completed and the recommendations adopted.
Sport Ireland said it must also be satisfied "that all necessary processes and controls are in place to ensure the FAI's ongoing compliance with the terms and conditions of grant approval".
The body said it will continue to provide non-financial assistance and guidance to the FAI.
In a statement, FAI President Donal Conway said the association "is keen to restore trust and confidence and rebuild the relationship with Sport Ireland as soon as possible" and "is taking appropriate steps in this regard".
Officials from the FAI are due to appear before a meeting of the Oireachtas Sports Committee tomorrow.
Reacting to the development, soccer pundit Richie Sadlier said the move was a significant development and gives an indication of how seriously Sport Ireland is taking the issues which have been raised and are in the public domain.
He said the timing is significant, ahead of tomorrow's Oireachtas committee hearing.
Mr Sadlier said it is important the committee does not conclude proceedings until there is absolute clarity on all of the questions that remain unanswered.