The move came hours before a federal appeals court rejected an injunction blocking billionaire Elon Musk and the Department of Government Effectiveness (DOGE) from dissolving USAID, according to ABC News on March 29.

"Today, the State Department and USAID notified Congress of plans to implement a restructuring that will include transferring certain USAID functions to the State Department effective July 1," US Secretary of State Marco Rubio said on March 28.

"Thanks to President Donald Trump, the era of fiscal mismanagement and irresponsibility is over. We are reorienting foreign aid programs to align with what is best for America and our citizens," Rubio said.

Jeremy Lewin, a senior official at USAID, said the decision to dissolve the agency would "significantly improve the efficiency, accountability, consistency, and strategic impact of the delivery of foreign assistance programs, thereby allowing the country and President Trump to speak with one voice on foreign affairs."

The State Department "will seek to immediately cease independent operations of USAID" and "assess" whether to rehire a number of officials to "assume responsibility for managing USAID's remaining strategic and lifesaving assistance programs," according to a memo seen by ABC News. "This will also eliminate the need for USAID to continue to operate as an independent agency," the memo said.

USAID programs authorized by the State Department to continue include “humanitarian assistance, global health capacity, strategic investments, and limited national security programs.” “Functions that potentially overlap with the current mission of the State Department will be eliminated during the restructuring,” the USAID announcement added.

Experts say the decision to completely dismantle a federal agency is expected to prompt legislative scrutiny. Some observers say the effort to disable USAID would weaken U.S. influence abroad and have dire consequences for some of the world’s most vulnerable populations, who depend on Washington for health care, food and other basic needs.