The US military says it has made a final decision to cancel $300 million in aid to Pakistan that had been suspended over Islamabad’s perceived failure to take decisive action against militants, in a new blow to deteriorating ties. 

A Pentagon spokesman revealed the move exclusively to Reuters and said the funds will be driven elsewhere if Congress approves.

It adds to a broader cut to security aid this year when President Donald Trump accused Pakistan of paying back past aid with 'nothing but lies and deceit'.

However, the latest move comes just days before a visit by US Secretary of State Mike Pompeo to meet new prime minister Imran Khan.

Defence chief Jim Mattis told reporters last week that militants will be a 'primary part of their discussion'.

Experts on the conflict next door in Afghanistan, America's longest war, argue that safe havens in Pakistan have helped insurgents.

They say it gives Taliban-linked militants a place to plot deadly strikes and regroup after ground offensives in Afghanistan.

Pakistan denies those charges.

This isn't the first time the Pentagon has cancelled these kinds of funds but this year, as Pakistan's economy struggles, the move may get more attention from Imran Khan, the new leader.

One analyst told Reuters the Pentagon may be aiming to squeeze the country when it's vulnerable.

As for Khan, he has opposed America's open-ended presence in Afghanistan and once suggested he might order US drones to be shot down if they enter Pakistan's airspace.

In a victory speech, he said he wanted 'mutually beneficial' ties with Washington.

Khan is set to meet Pompeo in Islamabad on Wednesday.