"A general strike has been declared at the foreign ministry," its website said.
"The ministry in Jerusalem will remain closed and Israel's missions abroad will not open as of Monday (tomorrow) morning, March 24."
Israel media said the open-ended walkout was the first by diplomats in the country's 65-year history.
The latest step ratcheted up industrial action that has been in place since the wage talks on March 4.
The ministry website said that since then diplomats have not dealt "with foreign representatives... Official visits of any kind, either in Israel or overseas," nor issued visas or provided consular services.
The Vatican said earlier this month that there were no plans to cancel the trip but confirmed that the dispute was "likely to cause complications in preparing for the trip."
Israeli Foreign Minister Avigdor Lieberman, who media said would be locked out of his office during the strike, slammed the stoppage.
"It is a miserable decision that points to loss of control," he said in a statement. "It has no benefit and only causes more damage to the ministry's workers."
"We will do everything necessary to minimise the damage caused to the country and its citizens."
"The plight of our foreign service personnel has become increasingly unbearable," its web edition said.
"For over a decade now, the salaries of these dedicated people have not been adjusted in the respective countries in which they serve to compensate for inflation.
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