Every year 1,000 have benefited from the best practice research scholarships for small-scale projects since they were piloted in 1999.
From next year, direct financing for the pound;40 million scheme will end.
Instead, the money will be included in cash for professional development to go straight into school budgets. Heads and governors will decide how to spend it.
Iris Keating, who leads the assessment panel for the scholarship applications, said: "I'm absolutely devastated. This award makes teachers feel empowered. If the budget is spread across all the schools in England, each school will get pound;180 a year. There isn't a lot you can do with that."
She added that the scheme has also played a valuable role in improving motivation and retention in the profession.
Gill Davies, Year 5 teacher at Newchurch primary in Warrington, received pound;2,400 last year, for research with key stage 2 pupils.
She said: "We were taken seriously as researchers: it validated what we were doing. It gave me a new outlook on life, and on how children learn."
She added that the project gave her new skills, which have made her more effective in the classroom.
John Bangs, head of education for the National Union of Teachers, believes that teachers have been forced to surrender valuable professional development in order to finance the Government's workload reforms.
With competing demands for resources, he said, schools are unlikely to allocate any of their budget for independent research: "You can kiss goodbye to everything that teacher organisations have fought for: the entitlement for mature teachers to do research which will help themselves and other teachers."