The government expects to save $7.6 billion over five years by freezing its aid budget and pegging any increases to inflation from 2016/17.
Of that $2 billion comes from dropping Labor's commitment to ensure aid spending equated to half a per cent of gross national income towards the end of the decade.
The "reprioritised funding" on aid, or official development assistance, was the top savings measure in Tuesday's federal budget.
The government outlined its aid budget priorities in January, but provides new context when compared to other savings initiatives in the budget.
The cuts to aid spending are expected to save more cash than proposed changes to the family tax benefits or the introduction of GP co-payments.
As part of the savings measures outlined in the budget, the government has decided to put a cap on departmental costs in relation to the program.
The Department of Foreign Affairs and Trade will not be able to spend more than five per cent of the total aid budget on administering the program.
The government also has decided it will reverse previous decisions to join the African Development Bank Group and the International Fund for Agricultural Development.
Foreign Minister Julie Bishop will soon announce new performance benchmarks for the aid program to ensure Australia's getting value for money in its projects abroad.
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