1MDB and its founder Malaysian Prime Minister Najib Razak are battling allegations that billions were looted from the fund.
1MDB and its founder Malaysian Prime Minister Najib Razak are battling allegations that billions were looted from the fund in complex overseas deals that are being investigated by authorities in several countries.
Both the fund and Najib have vehemently denied wrongdoing.
1MDB agreed in April to pay Abu Dhabi's International Petroleum Investment Company (IPIC) about $1.2 billion to settle debts.
Half was due to be paid to the emirate's sovereign wealth fund at the end of July and the rest by the end of the year, IPIC said at the time of the agreement.
IPIC said in a statement to the London Stock Exchange Tuesday that it "has not received the payments of US$602,725,000 and US$26,024,509.59 that were due to be paid".
It said there was a five-day period for 1MDB to resolve the payment before becoming subject to additional obligations.
1MDB said in a statement that it was awaiting fresh funds and had written to IPIC pledging to make the payment in August.
1MDB and the Abu Dhabi fund had been involved in a dispute that extended to repayments on two sets of bonds issued by the Malaysian fund.
In April 2016 1MDB defaulted on $1.75 billion in bonds after missing an interest payment of $50 million.
In June that year Abu Dhabi announced it was seeking $6.5 billion from the Malaysian fund through international arbitration.