Oxfam has agreed not to bid for any new funding from Britain's government until London is satisfied the charity meets sufficient ethical standards, development minister Penny Mordaunt says.
The Times newspaper reported last week that some Oxfam staff had paid for sex with prostitutes in Haiti after the country's 2010 earthquake.
Oxfam, one of the world's biggest disaster relief charities, said an internal investigation in 2011 confirmed sexual misconduct occurred, and has apologised.
Earlier on Friday Oxfam said it would create an independent commission to review the charity's practices and culture.
"Oxfam has agreed to withdraw from bidding for any new UK Government funding until (the Department for International Development) is satisfied that they can meet the high standards we expect of our partners," Mordaunt said in a statement on Friday.
In an emailed statement, Oxfam said it felt it was right not to bid for any new government contracts, given public concern about the revelations of the last week.
"We are committed to proving that we deserve the confidence of the UK public," the charity said.
Other charities which receive funding from Mordaunt's department have until February 26 to provide assurances that they effectively safeguarded people they helped, and reported any breaches to the government.
"At that stage we will make further decisions about continuing or amending how those programmes are delivered. Our primary guiding principle in this will be the welfare of the beneficiaries of UK aid," she said.