The Polisario Front, Western Sahara's independence movement, on Sunday said it was halting its ties with Madrid, following the European country's decision to back Morocco's plan giving autonomy to the former Spanish colony.
Spain has supported the autonomy plan as a way to resolve a long-running dispute over Western Sahara, which Morocco considers as its own territory.
But the Polisario, backed by Algeria, has rejected the autonomy proposal and wants an independence referendum.
The Polisario said the plan aimed to legitimize the annexation of Western Sahara "ignoring the inalienable rights of the Saharawi people to self-determination and independence."
Last month, Spain told Morocco it regarded the autonomy proposal for Western Sahara as "serious, credible and realistic."
Spain's backing for Morocco's plan has helped to end a yearlong diplomatic crisis between the two countries.
Moroccan-Spanish ties had soured when Spain admitted Polisario leader Brahim Ghali in April last year for medical treatment, without officially telling Rabat.
Madrid's policy shift in favor of Morocco's plan was criticized by lawmakers in Spain.