The World Bank has suspended plans to give Sudan $2 billion in aid following Monday’s military coup.
Political leaders were arrested on Monday, sparking nationwide protests and international condemnation.
The African Union (AU) has also suspended Sudan from the bloc over the "unconstitutional" seizure of power. The US has also frozen $700m (£508m) in aid.
According to Prime Minister Abdalla Hamdok,The World Bank has contributed about $3bn in aid to Sudan to support agriculture, transport, health care and education.
David Malpass, president of the bank said he was fearful of the “dramatic impact” the events could have on the country’s social and economic recovery.
“We hope that peace and the integrity of the transition process will be restored, so that Sudan can restart its path of economic development and can take its rightful place in the international financial community,” Malpass said.
Sudan's civilian and military leaders had been in a fragile power-sharing agreement for the past two years.
The sudden cut to aid is likely to have major consequences for Sudan's ailing economy, at a time when it was just starting to get back on its feet.
Sudan had struggled for several decades after the US imposed stringent sanctions. However, in 2020, Washington removed the country from its state sponsor of terrorism blacklist, eliminating a major hurdle to much-needed aid and financial investment.
The World Bank and IMF in June granted Sudan debt relief under the Heavily Indebted Poor Countries Initiative, cutting the nation’s debt in half to about $28 billion, and the institutions have offered additional help if economic reforms continue.
Meanwhile, street protests continued for a third day, with at least 10 people killed after soldiers opened fire on crowds. Troops reportedly travelled house to house in Khartoum arresting local protest organisers.
Trade unions representing doctors and oil workers said they were joining the demonstrations, as did staff at the Sudanese Banking Association.