The Commonwealth has cut $1 million in annual funding to the Canberra Islamic School following a long-running investigation into its finances and connections with the Australian Federation of Islamic Councils.

The decision throws the future of 216 students into immediate doubt with the school to lose its provisional ACT registration as a result.

ACT Education Minister Shane Rattenbury said on Monday that the Education Directorate would be working to ensure all Islamic school students were accommodated in government schools from the beginning of Term 2.

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