The United States have cut funding to the UN Educational, Scientific and Cultural Organisation as Palestine was awarded a seat in the 194 member body.
A vote at the UNESCO headquarters in Paris saw 107 member states supporting the resolution admitting Palestine to the organisation, despite strong protest by the US and Israel.
The US, Canada, Israel and Germany voted against the resolution while the UK abstained.
France, Brazil, Russia, China, South Africa and India all voted for the resolution, which saw Palestine join the first UN agency since their bid for recognition in September.
US State Department spokesperson Victoria Nuland told reporters in Washington after the vote:
"We were to have made a $60m payment to Unesco in November and we will not be making that payment.
"Today's vote by the member states of UNESCO to admit Palestine as a member is regrettable, premature, and undermines our shared goal of a comprehensive, just and lasting peace in the Middle East,"
The US contribute around a fifth of UNESCO’s annual budget.
The Palestinian Authority is thought to plan a move to apply for world heritage status with UNESCO at several sites currently occupied by Israel, including the Church of Nativity in Bethlehem.
The Israeli Foreign Minister Avigdor Lieberman harshly criticised the move.
“My recommendations will be very clear,” Lieberman told parliament. “We need to weigh cutting all ties with the Palestinian Authority. I’m not prepared for Israel to become the ultimate sucker in the Middle East. We cannot continue to accept unilateral measures time after time.”