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South Africa's cabinet says it will withhold $28m of agricultural aid to neighbouring Zimbabwe until a representative government is in place.
Zimbabwe's ruling and opposition parties are deadlocked over the creation of a unity administration.
South Africa's cabinet said the impasse was creating a humanitarian crisis.
The current outbreak of cholera was a clear indication that Zimbabweans were becoming "victims of their leaders' lack of political will", it said.
"No amount of political disagreement can ever justify the suffering that ordinary Zimbabweans are being subjected to at the moment," the cabinet's strongly worded statement said.
Correspondents say it is the first indication that South Africa is taking a tougher stance on Zimbabwe.
Former South Africa President Thabo Mbeki, who negotiated September's power-sharing agreement between the ruling Zanu-PF and opposition Movement for Democratic Change (MDC), was an advocate of quiet diplomacy.
But two months on and several rounds of talks have failed and aid groups say Zimbabwe is facing a major humanitarian crisis.
They expect that more than five million people, or nearly half the population, will need food aid by early next year.
The economy is in freefall, with inflation last listed in July, at 231,000,000%.
An outbreak of cholera is reported to have caused dozens of deaths and health services are in a state of collapse.
The BBC's Peter Biles in Johannesburg says the outbreak appears to have spread to South Africa
Three people are reported to have died in the town of Musina close to the border with Zimbabwe and more than 70 people there are receiving treatment, he says.
The South African cabinet statement also said it would send assistance to help Zimbabwe deal with the cholera outbreak.
The Elders
Meanwhile, Zimbabwe's government has denied a report that it was blocking a visit from former UN head Kofi Annan, former US President Jimmy Carter and human rights activist Nelson Mandela's wife Graca Machel.
The three international figures are part of a group called the Elders, set up to tackle world conflicts.
In a statement, the Elders said they would visit the region on Friday "to make a first hand assessment of the humanitarian situation in Zimbabwe".
"The purpose of our visit is to meet those working on the ground to better assess the extent of the crisis and how assistance can be improved," Mr Annan said.
"Food shortages, a lack of seed and fertiliser for planting and the breakdown in health services are all having a serious effect on the people.
"We understand that the situation requires an urgent response and that delays will only prolong the people's suffering."
The Herald, seen as a mouthpiece for President Robert Mugabe's Zanu-PF party, had reported a government official as saying the planned mission was biased.
Mr Annan said they had no intention of becoming involved in the ongoing political negotiations.
The power-sharing deadlock follows disputed presidential elections earlier this year.
Mr Tsvangirai won the first round in March, but not by enough to secure outright victory.
He then pulled out of a run-off in June, citing a campaign of violence against his supporters.
Source: BBC
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