A serious rift has arisen between the Veterans Affairs Minister and the Australian War Memorial over a funding cut for travelling exhibitions.

Minister Michael Ronaldson said on Wednesday it was "unfortunate" if the memorial had commissioned any more exhibitions after an official warning in May that the $800,000 a year program was under review because of budget cuts.

"The AWM was advised by DVA [Department of Veterans Affairs] in May that, because of the requirement to fund a number of initiatives, the travelling exhibitions program was under review," the minister's spokesman said.

"It is unfortunate if the AWM has chosen to lock in exhibitions, having been made aware of that situation."

The spokesman said the government was providing $10 million to the memorial to develop a travelling exhibition for the centenary of Anzac.

On Wednesday night, however, the memorial contradicted the minister, saying it had not had warning of the funding cut.

"At no stage before Thursday, 14th of August, were we given any indication that future funding for the travelling exhibitions was at risk," a memorial spokesman said.

"The memorial was advised in late May that DVA was reviewing its commemorative program which includes a range of overseas events but this did not mention the travelling exhibitions."

The spokesman said the travelling exhibitions had been planned with most of the bookings locked away by the end of last year.

The Anzac centenary exhibition was funded separately to the memorial's travelling exhibitions program.

The travelling exhibitions program has been running for 17 years, with more than 200,000 people outside Canberra viewing the displays each year.

Memorial director Brendan Nelson said late on Monday the funding cut had forced him to cancel the travelling exhibitions.

"After 17 years of its co-sponsorship, the Department of Veterans Affairs informed the memorial last week that it has found it necessary to cease funding the travelling exhibition program effective immediately," a statement from the memorial said. "There is no plan for it to be reinstated in the foreseeable future." 

The funding cut comes as the memorial is revamping its World War I galleries and gearing up for commemorations for the centenary of WWI.

The Community and Public Sector Union described the funding cut as short-sighted and said thousands of Australians would be robbed of the chance to participate in the commemoration of Australia's history.

Labor's spokesman for veterans affairs, David Feeney, called on the government to reverse the "outrageous" cuts.

The exhibitions being dropped include Remember MeThe Lost Diggers of VignacourtBen Quilty: After Afghanistan, Nurses: From Zululand to Afghanistan, A Camera on Gallipoli and Reality in Flames.

Travelling exhibitions will return to the memorial once they conclude at their present venues and the memorial will seek private sponsorship to continue the program.

The spokesman for Senator Ronaldson said the travelling exhibitions program, funded jointly by the memorial and the Veterans Affairs Department, had been conducted under a memorandum of understanding signed in 2010.

"Under the MOU, either the department or the memorial could terminate the agreement," he said.

"The department, with its requirement to fund proactive measures to assist contemporary veterans and to fund centenary of Anzac commemorative events, made the decision to discontinue funding its share of the travelling exhibition, pursuant to the MOU.

"The Australian War Memorial is Australia's home of remembrance, reflection and commemoration. 

"This year, the government has committed $47.8 million to the memorial, up from $40 million in Labor's budget last year.

"The government has recently increased funding to $100,000 per year for the War Memorial to support the school's wreath-laying program to ensure that schoolchildren visiting the memorial can pay appropriate tribute to those who made the supreme sacrifice.

"The government is working closely with the Australian War Memorial and corporate partners to deliver a multimillion-dollar national travelling exhibition for the centenary of Anzac. We have provided $10 million in seed funding to the memorial to scope this."