The intended cut to 0.5 percent of GNI, which is a broader measure than gross domestic product, would mean Britain is no longer the only G7 member to meet the target and contradicts promises made last week by Foreign Secretary Dominic Raab to protect aid.
Sinn Fein MLA Conor Murphy has hit out at the announcement by Chancellor Rishi Sunak, which he said would not support the health service or the most vulnerable in society.
The "long-term scarring" from the crisis means that in 2025 the economy will still be around 3% smaller than had been expected in March this year, Mr Sunak told MPs.
Britain's Chancellor of the Exchequer Rishi Sunak leaves Downing Street, in London, Britain, November 25, 2020. And our economic emergency has only just begun.
Public borrowing this fiscal year is set to hit 394 billion pounds, or 19% of national income, "the highest recorded level of borrowing in our peacetime history".
UK Office for Budget Responsibility Sees Economy Shrinking 11.3% in 2020
"Borrowing falls to 164 billion pounds next year, 105 billion pounds in 2022-23, then remains at around 100 billion pounds, 4% of GDP, for the remainder of the forecast".
"This situation is clearly unsustainable over the medium term. we have a responsibility, once the economy recovers, to return to a sustainable fiscal position", he said.
Rishi Sunak is expected to suspend a legal commitment to spend 0.7 per cent of gross national income on global development.
But Sunak is not expected to give pay rises to public sector workers such as nurses and teachers who have played key roles during the Covid-19 outbreak.
Mr Sunak said: "Sticking rigidly to spending 0.7% of our national income on overseas aid, is hard to justify to the British people, especially when we're seeing the highest peacetime levels of borrowing on record".More news: CDC raises COVID-19 infection risk for cruise travel to highest level
The OBR has also reported that the United Kingdom is experiencing a dramatic increase in unemployment, with the expectation that it will rise to 7.5 percent in the second quarter of next year.
UNIONS intensified their threat of industrial action today after the government confirmed a "divide and rule" pay freeze for millions of public-sector workers.
The ruling Tory government has been criticised for failing to uphold last year's campaign promise to continue spending 0.7 percent of GDP on aid overseas.
In a letter to the Prime Minister, she warned: "Cutting UK aid risks undermining your efforts to promote a Global Britain and will diminish our power to influence other nations to do what is right".
In his Commons statement on Wednesday, the Chancellor will announce the launch of a three-year Restart programme, worth £2.9 billion, which will help more than a million unemployed people get back into work in the wake of the pandemic.More news: SpaceX Starlink Launch: Record-Breaking Mission Scrubbed but New Schedule Expects Hope
Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8% - the fastest rate in 15 years.
A new UK infrastructure bank will be based in northern England while the UK Shared Prosperity Fund - replacing European Union funding - will reach around £1.5 billion a year.
Unusually, because of the economic uncertainty caused by the virus, most Government departments will only receive a one-year spending allocation rather than the usual multi-year settlement.
DUP Treasury spokesman Sammy Wilson said: "Northern Ireland businesses are also set to benefit from a UK-wide increase in infrastructure spending, with a particular focus on the additional money set aside for new and more efficient buses".
Britain's government on Wednesday unveiled plans to slash the foreign aid budget to help mend its coronavirus-battered finances, defying calls from high-profile figures to protect the world's poorest people.More news: Tyson under control as he prepares for bout with Jones