The UN Food and Agriculture Organization "postponed the assumption of functions by Ms. Nadine Heredia Alarcon as Director of the FAO Liason Office in Geneva, in view of current procedural developments in Peru," it said in a statement.
The UN agency, which is headquartered in Rome, said it had informed the Peruvian government of its decision on Monday.
"FAO will continue monitoring the situations of Ms. Heredia, who will remain a FAO employee, with the aim of identifying appropriate measures to apply in the specific circumstance at hand," the statement said.
The appointment had sparked outrage in Peru, where Heredia is accused along with her husband, former president Ollanta Humala, of laundering $1.5 million (1.4 million euros) allegedly given to fund his 2006 and 2011 presidential campaigns.
Peru's foreign ministry said last week it had complained to the FAO's representative in Peru "against a decision that could be interpreted as interference in a judicial investigation in Peru".
Heredia, who is believed to be in Rome, recently had a travel ban against her lifted, only to see a judge on Saturday order her back to the country within 10 days, and to quit her FAO job.
Humala, who left office in July after his term ended, was ordered not to leave the country as of last week.
Prosecutors believe the laundered funds came from the government of Venezuela's then-president Hugo Chavez and two large construction firms in Brazil.
If found guilty, the couple face between eight and 10 years in prison.
FAO stressed in its statement that at "no point did it intend to interfere in Peru's internal political or judical affairs, over which Peruvian authorities have the sole authority."
It maintained meanwhile that Heredia had been hired on merit, and said it "considers that the basic principle that a person is presumed innocent until proven otherwise must be maintained and followed."
FAO did not say whether the immunity protections that come with all high-level UN postings would be lifted in Heredia's case.
Last week, Swiss authorities told AFP that such protections shield holders from arrest, detention and any form of prosecution.