The Home Secretary said it was "not acceptable" that the Police Federation received public funding when it was sitting on "vast reserves" worth tens of millions of pounds.
In a speech to around 2,000 officers at the Police Federation annual conference, Theresa May announced the organisation would not receive public funding of £190,000 a year from August.
She said: "It is not acceptable that when the Federation is sitting on vast reserves worth tens of millions of pounds, it is in receipt of public funds to pay for salaries and expenses of the chairman, general secretary and treasurer.
"We have already said we would reduce this spending from £320,000 to £190,000 per year but I can announce today that this funding will be stopped altogether from August.
"Instead, the money will go into a new fund to accelerate the introduction of Police First - a new scheme designed to attract the brightest young university graduates into the police."
Public funding for the Police Federation will be "stopped altogether" from August, from its current level of £190,000 a year, the Home Secretary has told the organisation's annual conference in Bournemouth.
Home Secretary Theresa May will deliver the keynote speech to the Police Federation annual conference in Bournemouth today.
A report by a committee of MPs today gave a damning verdict on the body that represents rank and file police officers in England and Wales.
The report described the organisation as "less of a Police Federation, more of a soap opera," and said it is in urgent need of reform.
This report is by ITV News Political Correspondent Romilly Weeks:
The General Secretary of the Police Federation of England and Wales, Ian Rennie, has also announced he will retire at the end of the Police Federation annual conference on May 24.
A spokesman said: "Ian has been the chief negotiator on police pay, terms and conditions for the last six years, leading negotiations on behalf of all police officers during an incredibly turbulent period in policing history."
The Chairman of the Police Federation Steve Williams will retire from the police service at the end of May following "a turbulent period" in the federation's history, the organisation has announced.
In a statement, Mr Williams said: “The Police Federation has faced a turbulent period in its history and there has been much criticism of our organisation and the way certain members behaved."
Mr Williams was instrumental in commissioning the Independent Review into the Police Federation in 2012, a decision welcomed by many from across the political landscape, in the wake of the Plebgate incident and after confidence in the organisation was severely tested.
Ian Rennie, the general secretary of the Police Federation, has announced that he is to retire in May.
The Chairman of the Police Federation Steve Williams has said the damning review of the body by the RSA, which revealed in-fighting, political posturing and divisions over cash reserves, offers a "roadmap of reform" which must be embraced.
Responding to the publishing of the report, he said:
The review into the Police Federation has called for a new national board to be set up and led by an elected chairperson to end bitter division within the body and instigate the recommended reforms.
The RSA report said:
The report also called for the existing rank committees to be abolished and subscriptions to be sent directly to the central federation rather than regional branches.
Chaired by Sir David Normington, the review found 68% of the membership felt fairly or very dissatisfied that the national leadership was adequately safeguarding their interests.
The body that represents the 127,000 police officers in England and Wales has been told to make "urgent" sweeping changes amid bitter internal rows over accounts and "political games" being played out to the detriment of its members.
The Police Federation received a damning review from the charity the RSA, which comes in the wake of the "Plebgate" scandal, with some of the membership being accused of pursuing "narrow self-interest" in their actions.
The review found the body was heavily divided into local factions, with 13 branches out of 43 refusing to provide details of profits placed in separate accounts.
The RSA raised questions over a cash surplus of nearly £65 million and called for subscription rates to be cut by 25% next year.