The decision comes in response to Somali security forces' seizure of a UAE-registered civil aircraft at Mogadishu Airport and confiscation of money destined to pay the soldiers.
Analysts say Somalia's relations with UAE are strained by a dispute between Qatar and Saudi because Mogadishu has refused to take sides.
Last month, Somalia's government seized several bags of money carrying nearly $10m from a plane that arrived at Mogadishu airport from Abu Dhabi.
The UAE claimed it has coached thousands of soldiers and paid the wages of 2,407 Somali troopers. For Abu Dhabi, the seizure incident contravened agreements signed by the two countries.
The UAE has trained hundreds of troops since 2014 as part of an effort boosted by an African Union military mission to defeat an Islamist insurgency and secure the country for the government backed by Western nations, Turkey and the United Nations.
Somalia had no opinion, nevertheless it explained it would finish the UAE funds of its army.
In March, UAE agreed to train security forces in the semi-autonomous region Somaliland. The UAE also plans to open a military base there and has invited Somaliland officials to visit the Emirates.
Mogadishu dismissed the agreements as "non-existent, null and void".
A United Nations Security Council report in November also alleged the UAE handed out cash to influence voters in Somalia's presidential election a year ago.
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