London currently gives £19m in bilateral aid a year to Pretoria, down from a peak of more than £40m in 2003.
Britain said its relationship with South Africa should be based on trade rather than aid following its transition from apartheid to a "flourishing democracy".
"South Africa has made enormous progress over the past two decades, to the extent that it is now the region's economic powerhouse and Britain's biggest trading partner in Africa," international development secretary Justine Greening told a conference of African ministers and business leaders in London.
"I have agreed with my South African counterparts that South Africa is now in a position to fund its own development," she said.
Her ministry said the aid programme would focus on completing projects that are already underway before the funding runs out in 2015.
"These programmes will help three million more people start or expand their own businesses and help reduce the number of women dying in childbirth by more than 10%," the ministry said.
British Prime Minister David Cameron has repeatedly vowed to protect the 0.7% of national income that it spends on overseas aid from his government's austerity drive.
But in November last year Britain announced that it would stop all its aid to India in 2015 because of New Delhi's growing economic power.
From 2015 Britain will work with South Africa primarily on development projects elsewhere on the continent, while continuing to provide technical assistance to help reduce poverty within its own borders.
"It is right that our relationship changes to one of mutual co-operation and trade, one that is focused on delivering benefits for the people of Britain and South Africa as well as for Africa as a whole," Greening said.
Britain already works with the South African Revenue Service on an aid project to strengthen tax systems in other countries including Kenya, Angola and South Sudan, her ministry said. It is also helping South Africa's health ministry to share its expertise across the region.
Source: AFP via I-Net Bridge
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