While the U.S. stopped funding UNESCO after it voted to include Palestine as a member in 2011, the State Department has maintained a UNESCO office at its Paris headquarters and sought to weigh in on policy behind the scenes.
'This decision was not taken lightly, and reflects U.S. concerns with mounting arrears at UNESCO, the need for fundamental reform in the organization, and continuing anti-Israel bias at UNESCO,' State Deparment spokesman Heather Nauert said in a statement. 'The United States indicated to the Director General its desire to remain engaged with UNESCO as a non-member observer state in order to contribute.'
The decision comes as the U.N. Educational, Scientific and Cultural Organization is voting to choose a new director this week, in tense balloting overshadowed by the agency's funding troubles and divisions over Palestinian membership.
Many saw the vote to include Palestine as evidence of long-running, ingrained anti-Israel bias within the United Nations, where Israel and its allies are far outnumbered by Arab countries and their supporters.
UNESCO is best known for its World Heritage program to protect cultural sites and traditions around the world. The agency also works to improve education for girls in desperately poor countries and in scientific fields, to promote better understanding of the horrors of the Holocaust and to defend media freedom, among other activities.
The Trump administration has been preparing for a likely withdrawal for months, and a decision was expected before the end of the year, according to U.S. officials. Several diplomats who were to have been posted to the mission this summer were told that their positions were on hold and advised to seek other jobs.
In addition, the Trump administration's proposed budget for the next fiscal year contains no provision for the possibility that UNESCO funding restrictions might be lifted.
The lack of staffing and funding plans for UNESCO by the U.S. have been accompanied by repeated denunciations of UNESCO by senior U.S. officials, including U.S. Ambassador to the United Nations Nikki Haley.
The U.S. pulled out of UNESCO in the 1980s because Washington viewed it as mismanaged and used for political reasons, then rejoined it in 2003.
VOA's Nike Ching contributed to this report.