Myanmar has seen violence and protests since February, when the military ousted civilian leader Aung San Suu Kyi and reversed years of progress toward democratic rule.
The latest move is part of a growing attempt by the junta to block citizens from accessing the internet through social media, mobile phones or news services.
The growing use of force from the military has led to concerns that the country could soon reach a civil war of "an unprecedented scale," Christine Schraner Burgener, the U.N. special envoy for Myanmar, warned.
A recent military coup in the country saw the detention of Nobel Prize-winning leader Aung San Suu Kyi.
More than a dozen police trucks with four water cannons were deployed near Sule Pagoda in the capital, where many of pro-democracy protests have been taking place.
"As part of today's actions, USAID [U.S. Agency for International Development] will redirect $42.4 million of assistance away from work that benefits the Government of Burma," the White House wrote in a statement on Thursday.
"The strong and unified message emerging from the United States has been essential…to encourage other countries to join us in pressing for immediate return to democracy," the president said.
The Mynamar military issued a coup against the country's elected leaders on Monday, prompting health care workers to mobilize widespread protests across the nation.
Nobody in the world who values human rights and the rule of law likes what is going on in the streets of Myanmar's capital city right now.
The incident took place in the Rakhine state, which has been in conflict due to the ongoing civil war between Myanmar's military and Arakan Army rebels.
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The Rohingya crisis led more thousands march on the Myanmar embassy in Bangladesh on Monday — but there's no end in sight for what a U.N. official has called "ethnic cleansing."
Aung San Suu Kyi is scheduled to speak on Tuesday for the first time since the crisis.
Over 400,000 Rohingya have fled into Bangladesh after a military crackdown.
Ramzan Kadyrov appealed to Putin for help and condemned the persecution of the Rohingya people.
The Rohingya Muslims are one of the most persecuted ethnic groups in the world.
China conducted joint air and land drills near its unstable border with Myanmar as Beijing stressed national security.