Millions of dollars in federal funding for Australia's largest Islamic school in Sydney's south-west will be stopped, a review has reaffirmed.

Key points: Review confirmed school governance and financial issues

Review confirmed school governance and financial issues Malek Fahd School will appeal decision

Malek Fahd School will appeal decision School to remain open while some funding still available

The Malek Fahd Islamic School in Greenacre requested the review last month after being told its $19 million in federal funding was being revoked because of governance and financial issues.

Federal Education Minister Simon Birmingham said today the Government's original decision had been reaffirmed and funding would stop at the end of the week.

"The internal reviewer, who was independent of the original decision, considered the new information provided and based on all the available evidence, the school authority remains non-compliant with the requirements of the Australian Education Act 2013," he said in a statement.

"Therefore, the internal reviewer has affirmed the original decision and federal funding for Malek Fahd Islamic School Limited will cease from 8 April 2016."

School lawyer Rick Mitry said the revocation was a surprise, as a lot of work had been done to remediate the governance issues raised previously by the Federal Government.

"We had taken steps to comply with all of the requirements of the Federal Government," he said.

"All of the issues raised by them were addressed by us, including new accounting measures and a new interim board.

"We'll immediately make an application to the Federal Administrative Appeals Tribunal and an application for a stay of the orders revoking the funding until the appeal process has been completed."

'Some things that cannot be fixed overnight'

Chairwoman of Malek Fahd's interim school board Miriam Silva said the interests and welfare of students, teachers, staff and wider school community were the school's main priorities.

"We'll do everything that we can to address all of the concerns — the staff are pretty upset so I'm meeting with them this afternoon and obviously the parents and the students are pretty upset as well," Ms Silva said.

She said the board would work to address a number of concerns raised by the review, including the recovery of funds that may have been misspent.

"There are some things that cannot be fixed overnight, including documentation from things that happened before [the interim board was installed]," Ms Silva said.

"We still have to find documents and figure out what happened in the past, and whether we have any recourse to recovering funds that may not have been spent in educating children.

"These all are matters that must be rectified."

School to remain open despite funding to stop

Mr Mitry said the school would remain operational with several months worth of funding still available, pending the appeals process.

Senator Birmingham said he was committed to ensuring that all school authorities meet the requirements of the Education Act.

"[As] to ensure that our taxpayer dollars and any private investment by parents is being spent to benefit Australian students," he said.

"School governance should be of the highest standard and funding should be exclusively used for the education and welfare of students."