The Russian government gave the US until 1 October to close the mission.
USAID has worked in Russia for two decades, spending nearly $3bn on democracy and other programmes.
Analysts say the government's antipathy toward pro-democracy organisations may be to blame for the move.
Earlier this year, President Vladimir Putin alleged that protests surrounding his re-election were orchestrated by US-funded non-governmental organisations.
In announcing the closure of the USAID office, US state department spokesperson Victoria Nuland said: "We remain committed to supporting democracy, human rights, and the development of a more robust civil society in Russia and look forward to continuing our cooperation with Russian non-governmental organizations."
She would not be drawn on the reasons behind the Kremlin's decision, but said there was a sense "that they don't need this any more".
The United States began its operations in Russia after the end of the Soviet Union, spending around $2.7bn annually on projects aimed at promoting a wide range of human rights and civil society programs.
An annual budget of around $50 million also went towards health and environmental programmes.
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