File Photo: World Food Programme workers at a wheat storage warehouse in Adama, Ethiopia in January. AFP
The Ethiopian government's spokesman Legesse Tulu told journalists the decision by USAID and the World Food Programme (WFP) "punishes millions".
On Thursday, USAID, the US government's main international aid agency, said it was halting food distribution "until reforms are in place" to the way in which the aid is delivered.
The WFP followed suit on Friday, saying it was temporarily halting only some food aid assistance.
The decision will affect millions of Ethiopians facing severe food shortages due to a devastating war in the northern region of Tigray, and a punishing drought in the south and southeast that has also struck Somalia and parts of Kenya.
Last month, USAID and WFP said they would freeze food aid to Tigray after the agencies discovered that shipments were being diverted to local markets.
Neither agency has identified those responsible for taking the aid and reselling it.
However, Tulu said the decision to halt assistance was "political," adding that "to make the government only responsible (for the diversions) is unacceptable."
Ethiopia's government on Friday said in a joint statement with USAID that it was committed to addressing the "deeply concerning revelations of food aid diversion".
Due to conflict and drought, around 20 million people in Ethiopia depend on food aid, the UN's humanitarian agency (OCHA) said in May.
Ethiopia hosts nearly one million refugees, mostly from South Sudan, Somalia and Eritrea.
Nearly 30,000 fleeing the recent conflict in Sudan have since mid-April found refuge in the country.