The Havana embassy had already been operating with a reduced staff since September 2017, when diplomats and family members were evacuated after suffering brain injuries.
This "ordered departure status" will expire on Saturday but, rather than re-staffing as before, the embassy will now be declared an "unaccompanied post" where staff are not joined by families.
"The embassy will continue to operate with the minimum personnel necessary to perform core diplomatic and consular functions, similar to the level of emergency staffing maintained during ordered departure," the department said.
Cuba's communist government has angrily denied that it had anything to do with any attack on US personnel, and US officials have been unable to determine the cause of the injuries.
It also accused the US on Friday of scaling back its mission for political reasons, not security concerns.
This decision "is politically motivated and has nothing to do with the safety of US officials in Havana," said Carlos Fernandez de Cossio, US director of Cuba's foreign relations ministry.
But Secretary of State Rex Tillerson says Cuba is responsible for the safety of diplomats on its soil, and US officials insist Havana must have some idea who or what is behind the "attacks."
In all, at least 24 US envoys and family members fell ill with symptoms that resemble concussions but with no exterior signs of trauma, leaving investigators baffled.
The issue has poisoned any attempt to move forward with the fragile detente achieved between the former Cold War foes, who re-opened their embassies in 2015 for the first time since 1961.
Initially, US agents suspected the Americans had been targeted by some sort of acoustic weapon, although in public senior officials were more cautious, speaking only of "health attacks."
The first suspected attack has been traced back to November 2016 and the last two took place in mid-August 2017, even after Washington had protested to Havana and had withdrawn some staff.