Following a SEGAS general assembly meeting, the board said it would cease operating "until further notice", while calling on the state to review the funding situation following cuts in the 2011 and 2012 budgets for athletics.
Just eight years after hosting the Olympics in Athens, the government has already halted funding for the country's elite athletes preparing to compete in the 2012 London Games.
"The federation, under the authority of the general assembly, has unanimously decided to suspend all sporting activity until the decisions of the unfair and selective cuts in funding for the organisation in 2011 and 2012 are reviewed by the government," SEGAS said in a statement.
"The federation calls on the state's sports leadership, and particularly the Minister of Culture, Pavlos Geroulanos, to intervene in order to prevent the economic collapse and dissolution of the structure of Greek athletics.
"The federation will be ready to reconsider its position in the next few days for further escalation or de-escalation of decisions, depending on the progress that has been made concerning this major problem," it added.
The decision means no regional or national competitions will be held and expenses for athletes and coaches are frozen.
SEGAS made a similar move in December, suspending its operations for 15 days as a warning for the state to give assurances that more money would be available.
SEGAS president Vassilis Sevastis said in December that the sports ministry had cut funding by 50 percent from 2008 to 2011 and the federation budget approved for 2011 was 7,350,000 euros, which "barely covered basic operating costs".
He added that, according to the proposals from the finance ministry, further cuts in 2012 could reach up to 85 percent of those reported for 2011.
Greek athletics has felt the country's economic crisis more than most sports due to its reliance on state funding.
Olympic hopefuls have been forced to rely on handouts from the International Olympic Committee's solidarity programme after initial state cutbacks in funding at the end of last year.
That was followed in January by the announcement that the sports budget would be cut by 33 percent for 2011, while recent disparaging comments by several top Greek athletes that training facilities are poor have exacerbated the issue.
On top of that, the government's decision to withdraw 190 million euros of funding for accommodation projects for the Mediterranean Games ended in humiliation.
The Games, which were initially supposed to be held in Volos and Larisa in 2013, were taken away from Greece and awarded to the coastal city of Mersin in Turkey as a result.