The State Department says the U.S. is pulling out of UNESCO because of what Washington sees as its anti-Israel bias and need for "fundamental reform" of the U.N. cultural agency.

In a statement, the State Department said it notified UNESCO director Irina Bokova on Thursday of the decision. The U.S. will seek to have a "permanent observer" status instead.

It says the withdrawal will take effect Dec. 31, 2018. The United States suspended its UNESCO funding in 2011 over its vote to include Palestine as a member, and now owes about $550 million in back payments.

U.S. officials said Secretary of State Rex Tillerson made the decision and that it was not discussed with other countries but an internal U.S. government deliberation.

The officials, who were not authorized to be publicly named discussing the issue, said U.S. is notably angry over UNESCO resolutions denying Jewish connections to holy sites and references to Israel as an occupying power.

UNESCO is best known for its World Heritage program to protect cultural sites and traditions around the world. The agency also works to improve education for girls in desperately poor countries and in scientific fields, to promote better understanding of the horrors of the Holocaust and to defend media freedom, among other activities.

The Trump administration has been preparing for a likely withdrawal for months, and a decision was expected before the end of the year, according to U.S. officials. Several diplomats who were to have been posted to the mission this summer were told that their positions were on hold and advised to seek other jobs.

In addition, the Trump administration's proposed budget for the next fiscal year contains no provision for the possibility that UNESCO funding restrictions might be lifted.

The lack of staffing and funding plans for UNESCO by the U.S. have been accompanied by repeated denunciations of UNESCO by senior U.S. officials, including U.S. Ambassador to the United Nations Nikki Haley.

The U.S. pulled out of UNESCO in the 1980s because Washington viewed it as mismanaged and used for political reasons, then rejoined it in 2003.