The US military has announced that $300 million in aid to Pakistan has been cancelled.
The payment had been suspended over Islamabad's perceived failure to take decisive action against militants, in a new blow to deteriorating ties.
The so-called Coalition Support Funds were part of a broader suspension in aid to Pakistan announced by US President Donald Trump at the start of the year, when he accused Pakistan of rewarding past assistance with "nothing but lies and deceit."
The Trump administration says Islamabad is granting safe haven to insurgents who are waging a 17-year-old war in neighbouring Afghanistan, a charge Pakistan denies.
But US officials had held out the possibility that Pakistan could win back that support if it changed its behaviour.
Defence Secretary James Mattis, in particular, had an opportunity to authorise $300 million in CSF funds this summer - if he saw concrete Pakistani actions to go after insurgents.
He chose not to, a US official said.
"Due to a lack of Pakistani decisive actions in support ofthe South Asia Strategy the remaining $300 (million) was reprogrammed," Pentagon spokesman Lieutenant Colonel Kone Faulkner said.
He said the Pentagon aimed to spend the $300 million on "other urgent priorities" if approved by Congress.
He said another $500 million in CSF was stripped by Congress from Pakistan earlier this year, to bring the total withheld to $800 million.
The disclosure came ahead of an expected visit by US Secretary of State Mike Pompeo and the top US military officer, General Joseph Dunford, to Islamabad.
Mr Mattis told reporters on Tuesday that combating militants would be a "primary part of the discussion."
Experts on the Afghan conflict, America's longest war, argue that militant safe havens in Pakistan have allowed Taliban-linked insurgents in Afghanistan a place to plot deadly strikes and regroup after ground offensives.
The Pentagon's decision shows that the United States, which has sought to change Pakistani behavior, is still increasing pressure on Pakistan's security apparatus.
It also underscored that Islamabad has yet to deliver the kind of change sought by Washington.
