The Fifa Taskforce Against Racism and Discrimination was set up in 2013 to develop strategies to tackle the issue.
Fifa general secretary Fatma Samba Diouf Samoura said: "It had a specific mandate, which it has fully fulfilled."
But former Fifa vice-president Prince Ali bin al-Hussein said: "For it to be disbanded with Fifa considering its work done is extremely worrying."
Prince Ali, the president of the Jordan Football Association and a former Fifa presidential candidate, added: "The notion the current Fifa leadership believe the taskforce's recommendations have been implemented is shameful."
Anti-discrimination group Kick it Out was "perplexed" by the decision.
In a statement it said: "This comes at a time when there is clear evidence that discrimination, prejudice and hate are on the rise in developed societies.
"Organisations that are actively campaigning against racism and discrimination will be deeply disheartened to hear news of the disbandment, as they look to Fifa for leadership in a game which is so popular across the world."
However, Kick It Out did say it was "reassured" after holding talks with Fifa later in the day.
Hope not Hate chief executive Nick Lowles told the BBC the decision to wind up the taskforce sent out "a really bad signal".
He and Kick it Out chair Lord Ouseley also questioned what world football's governing body planned to do to tackle racism in the future.
Former taskforce member Osasu Obayiuwana said there "remained a lot of very serious work for the taskforce to have done".
Speaking at the Soccerex global football conference in Manchester on Monday, Samoura said the taskforce's recommendations had been turned into a "strong programme" to tackle racism.
She added: "My presence here is a demonstration that Fifa has a zero-tolerance policy against discrimination, not only racism but any kind of discrimination, including violation of human rights."
Samoura will present Fifa's first Diversity Award later on Monday.
What are the taskforce's recommendations?
The anti-racism taskforce was established by former Fifa president Sepp Blatter and headed by Jeffrey Webb until he was arrested in 2015 as part of an investigation into corruption.
Its recommendations included introducing extra observers at games and tough penalties for clubs whose players, officials or fans are guilty of racism.
Earlier this month, European football's governing body Uefa ordered Russian club FC Rostov to close a section of their stadium for a Champions League game against PSV Eindhoven as punishment for racist behaviour of their fans.
Uefa said fans in Rostov-on-Don, one of the host cities for the 2018 Fifa World Cup, were guilty of unspecified offences during their play-off victory against Dutch side Ajax on 24 August.