The East of England Ambulance Service is to have part of its funding withheld by an NHS Clinical Commissioning Group after failing to meet response targets.
The Cambridgeshire and Peterborough CCG said it had not met national targets across an entire year and it would penalise it by 2% of its contract.
In recent months the service has been criticised by a health watchdog and MPs, leading to a management shake-up.
The service has yet to comment or confirm how much the penalty would be.
The ambulance trust covers Cambridgeshire, Hertfordshire, Bedfordshire, Norfolk, Suffolk and Essex.
At a meeting between the two bodies on Tuesday, it was decided that the 2% cutback would continue, having been in effect since December, until issues at the trust could be resolved.
A report by the service last year showed it had failed in Suffolk, Norfolk and Cambridgeshire to reach its target of getting to 95% of Category A patients - those in life-threatening situations - within 19 minutes.
A "clinical capacity review", completed by the service in November, said it was currently under "considerable pressure" in all areas, with "very poor performance" in certain counties.
The service recently underwent a new inspection by the Care Quality Commission (CQC) after it failed in its standards of providing care. The results have yet to be made public.
The CCG, which is run by GPs and looks to ensure high quality NHS services are provided to people, said: "The national NHS contract has a financial consequence for ambulance trusts who fail to meet the agreed national standards for response times across an entire year.
"This equates to 2% of the contract value and unfortunately the East of England Ambulance Service Trust has fallen short of these standards and this consequence must be applied.
"NHS Commissioners are working closely with ambulance trust executives to ensure that the issues that are causing the deterioration in response times are addressed and, where necessary, reinvest these resources to improve care."