The federal government's aid cuts are wider than outlined in its latest budget announcement, agencies say.
But the government says the aid budget is significant and Australians will be proud of it.
Foreign Minister Julie Bishop on Saturday announced the government will earmark $5.042 billion in foreign aid expenditure for the 2013/14 financial year, focusing on the Indo-Pacific region.
She said while that's down $107 million from last year's budget, the cuts were necessary because the growth of the previous year's aid budget was "unsustainable" amid an overall budget deficit forecast for this year.
Ms Bishop said Australia needed to move away from a "hand out culture" and ensure its aid program funding was responsible and affordable.
"In this way we have an aid budget that the Australian people will be proud of."
However, the peak body for Australian aid and humanitarian NGOs, ACFID, said the actual cuts amounted to $625 million.
The figure is based on the coalition's pledge in September 2013 to cut the foreign aid spending.
"With the financial year more than half way through, we feel that it is more appropriate to calculate the difference between what was budgeted for in 2013-14 and what we have already been working towards for the present financial year, rather than looking backwards to the expenditure of financial year 2012-13 as the starting point," ACFID vice-president and Care Australia CEO Dr Julia Newton-Howes told AAP on Saturday.
Child-rights organisation Plan Australia and Oxfam also expressed disappointment with the cuts.
"Without the helping hand that Australian aid represents, many children will miss out on an education and the cycle of poverty will continue for generations," Plan International Australia CEO Ian Wishart said in a statement.
Mr Wishart said it will also mean the cuts will come out of programs already underway.
"Like any industry, our sector needs certainty and stability in order to do the best work we possibly can.
"But how can we do that when we don't know what the government will do next year, or the year after that or the year after that."
Oxfam chief executive Dr Helen Szoke said the cuts were disheartening.
"Just as Foreign Affairs staff had to do yesterday, we will now go to some of those people we have been supporting and tell them that we can no longer support them, which will be acutely disheartening for them," she said in a statement.
The federal opposition said curtailing foreign aid spending would put Australia's security and prosperity at risk.
"The government has taken money from some extraordinarily helpful,extraordinarily generous and good organisations which help some of the poorest people in our region," acting opposition foreign affairs spokeswoman Penny Wong said.
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