The move was criticised by foreign ministers from from 10 countries including the UK, who said the new rules were "restrictive" and "unacceptable".
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Well-known international non-governmental organisations (INGOs) such as ActionAid, the International Rescue Committee and the Norwegian Refugee Council are among those that will have their licenses suspended on 1 January, with their operations to end within 60 days.
Israel said the groups, among other things, had failed to hand over "complete" personal details of their staff.
The move was heavily criticised by foreign ministers from 10 countries including the UK, who said the new rules were "restrictive" and "unacceptab