The Federal Government has axed funding to an Islamic school in Sydney's south-west, saying it failed to address concerns about how the money was being spent.

The Malek Fahd Islamic School, which has several campuses including its largest one in Greenacre, and more than 2,400 students, received $19 million in funding from the Government in the past year.

Education Minister Simon Birmingham said the Government would stop funding the school, starting from April 8, because the money was not being spent only on education.

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