Funding for schools to bring pupils from different religions and backgrounds together is to be cut by 50% from September.
Shared education sees pupils from different schools and backgrounds meeting for classes and activities.
Hundreds of schools which take part face getting only half of the funding they received during 2022/23.
A letter from the Education Authority (EA) said the 50% cut was due to the "financial climate".
The letter to principals also said there was no funding available for shared education from the Department of Education (DE) after April 2024.
According to the most recent DE figures, about 700 schools and pre-schools had received funding for shared education projects as of June 2021.
The aim is to bring pupils from Catholic, Protestant and other backgrounds together on a regular basis for joint classes, activities or trips.
