Speaking to Fox News' Fox & Friends on Tuesday, Trump said Israel no longer needed the financial assistance, adding that Washington would still help the country if necessary.
Trump said he and Netanyahu had reached an agreement months ago to end the annual military funding.
"Now, as far as paying Israel, Bibi Netanyahu and I have made a deal that we give Israel $4 billion a year, and we made a deal months ago that we're stopping," Trump told the programme.
"We've already agreed that by the end of this year we won't be paying Israel. Now we'll help Israel if they need it," he added.
Trump also said some Democrats and left-wing politicians were using US military funding for Israel as a talking point to criticise Republicans.
