He noted that the cuts were agreed upon despite "multiple security challenges", the Dawn reported on Wednesday.
He further stated that the money saved would be diverted to aid the development of the merged tribal areas and Balochistan.
"I appreciate Pakistan Military's unprecedented voluntary initiative of stringent cuts in their defence expenditures for next Financial Year because of our critical financial situation, despite multiple security challenges.
"My government will spend this money saved on development of merged tribal areas and Balochistan," he tweeted very late on Tuesday.
However, Inter-Services Public Relations, the military's media wing, stated in a later tweet that the cuts "will not be at the cost of of defense and security", and that it was important for the military to participate in the rebuilding of Balochistan and the erstwhile tribal areas.
Director General of ISPR Maj Gen Asif Ghafoor further stated that the slashes would be managed "internally" by all three branches of the armed forces taking into account strategic compulsions.
Earlier in February, the government had decided not to make any cuts in the country's defence budget for the ongoing year.
"The country's defence budget is already low as compared to other states in the region, and therefore it should be increased," the then information minister, Fawad Chaudhry, had said.
According to experts, Pakistan's economy has grown by 5.2 per cent last year, but is forecast to steeply decline to 3.4 per cent this year and 2.7 per cent next year, before recovering to 4 per cent in 2021, according to the report.
( With inputs from IANS )