Letters from the Department of Environment to a range of organisations that work in areas like tourism, environmental heritage and hills management, began arriving on Wednesday.
It is understood a number of high profile organisation are badly affected.
In some cases the cuts runs to more than £200,000.
It follows a cut of more than 10% to the department's own budget which was finalised earlier this week.
One of the organisations affected is the Northern Ireland Environment Link.
Its funding has been cut from £200,000 to £50,000.
The letter it received said its funding would continue until June, but would be withdrawn after that.
Its chief executive Craig McGuicken said: "We knew that the department had taken a serious cut in the budget, but the sector has been surprised by the severity of this."
In the letter his organisation received, a departmental official wrote: "We will pay the relevant portion of our offer of funding for 2015-16 for the three month period from 1 April to 30 June 2015 in accordance with the verification and claim process set out in the letter of offer and to a maximum of £50,000.
"No further funding will be provided in future financial years in relation to our previous letter of offer.
"I appreciate that this letter will not bring welcome news to you."
The Belfast Hills Partnership has also been affected.
It helps to conserve and promote the mountains around the city.
Its core funding from the department has been reduced to zero from £50,000.
Its director Jim Bradley said: "Although NIEA [Northern Ireland Environment Agency] have been warning us of very drastic cuts, this is much more than just a major cut in funding, it is an end to funding of organisations, many of which NIEA set up to tackle specific needs and issues.
"This has nothing to do with how efficient or effective individual organisations were, it's a wholesale removal of a sector which delivered services much better and at lower costs than government could."
A representative from the Ulster Wildlife Trust said their annual grant of £220,000 was being totally cut.
She said it would have an impact on jobs.
"We're all very shocked. We expected cuts but not at this level. It will be a very different landscape we're going to be operating in," she added.
The Mourne Heritage Trust is losing three quarters of its funding for 2015/16 going from £225,000 to £56,000 pounds.
Chief Executive Martin Carey said the scale of the cut had come "as a complete surprise".
"As of July 1, the Northern Ireland Environment Agency will not be providing any funding for an Area of Outstanding Natural Beauty and for the Mourne Heritage Trust which it established."
He said it would affect the organisation's ability to maintain paths and stiles and collect litter.
He said the decision also jeopardised up to £1,000,000 pounds in `match funding` from organisations like the Heritage Lottery Fund and Big Lottery Fund.
Environmental groups in Northern Ireland are facing huge cuts to their budgets after the money they receive from government was slashed.