Chris Heaton-Harris has reaffirmed his intention to cut MLAs' pay by more than a quarter on the evening before the Stormont Assembly is due to be recalled.
It comes after legislation was enacted giving the Northern Ireland Secretary the powers to cut Assembly members' pay by 27.5%.
The new law also allows for the period within which a Northern Ireland Executive can be formed to be extended beyond six months.
The new deadline is January 19 2023.
The legislation also clarifies the limited decision-making powers provided to civil servants while there is no Northern Ireland Executive in operation.
"For over 200 days MLAs have been receiving full pay while failing to fulfil the full duties they were elected to do," Mr Heaton-Harris said.
"Reducing their pay until an Assembly is restored reflects the work they are currently carrying out.
"This pay reduction is a necessary step when the people of Northern Ireland are tackling significant cost of living challenges and, after long-term mishandling of the NI public finances [by NI ministers] that has left a staggering £660m black hole, further protecting public finances.
"I urge Northern Ireland's parties to use the time that this Act allows to work together and return to their full roles in a devolved government so that they can better serve the people of Northern Ireland."
The Northern Ireland Secretary did not clarify exactly when MLAs' pay would be cut.
It comes as the Stormont Assembly is due to be recalled on Wednesday as rival parties attempt to ramp up the pressure on the DUP to end its boycott of powersharing.
Several previous attempts to reconstitute the Assembly have already failed as the DUP has not supported the election of a speaker in protest over the implementation of the Northern Ireland Protocol.
The party has said it will not elect a speaker or form an Executive until the protocol's economic barriers on trade between Great Britain and Northern Ireland are removed.
This could be done through negotiation or through the UK's contentious bill that proposes to unilaterally remove the post-Brexit trading rules, which the EU has argued would contravene international law.
Negotiations between the UK Government and the EU to resolve differences over the protocol are continuing.
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