Officials said some of the money has already been transferred but that President Donald Trump's new administration would investigate last minute spending decisions to see if they can be adjusted.
"In a final act, then-secretary of state John Kerry instructed USAID to release $220.3 million for Gaza recovery programs," acting State Department spokesman Mark Toner said.
"The Department of State is currently reviewing last minute spending approved by the previous administration and will make adjustments if needed to ensure that it aligns with the priorities of the Trump-Pence administration."
In his final weeks in office, Kerry was critical of Israel's building of settlements on occupied Palestinian land, warning that it undercuts efforts to negotiate a two-state final peace deal.
Trump's administration is expected to be more sympathetic to Israeli Prime Minister Benjamin Netanyahu's government, and the new president has chosen an ambassador with a track record of backing settlements.
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