Information on the possible role of Chelsea Clinton in the foundation was not available.
Bill Clinton said the foundation will continue its work and would refocus its efforts after an overhaul that could take a year.
Nevertheless, if elected, the foundation will only accept contributions from US citizens and independent charities.
Under the changes, the foundation would no longer take money from any foreign entity, government, foreign or domestic corporations, or corporate charities.
Former President Bill Clinton speaks at an event in Denver for the Clinton Global Initiative America, an initiative of the Clinton Foundation, on June 10, 2015.
According to the AP, Bill Clinton denied that the changes were brought about by outside pressure, but said they were motivated by the need to eliminate any concerns if his wife wins the White House.
This latest development is also coming amid new allegations that indict Hillary Clinton of granting foundation donors favorable access while she ran the State Department.
He characterized the foundation's receipt of foreign dollars as a " massive, ongoing conflict of interest that gets bigger by the day".
The Bill, Hillary & Chelsea Clinton Foundation, founded in 2001, has raised more than $2 billion for causes that focus on health and environmental issues, mainly in the developing world.
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Some of the group's funding has come from foreign donations and political donors to the Clinton family.
Democrat Hillary Clinton leads Republican Donald Trump in most national polls with less than three months before November's election.
A U.S. official also told CNN last week that the Federal Bureau of Investigation and Department of Justice met several months ago to discuss opening a public corruption case into the Clinton Foundation, after the Federal Bureau of Investigation received notification from a bank of suspicious activity from a foreigner who had donated to the foundation. This move provides her campaign with positive publicity, yet it remains unclear as to what extent these donations would not be allowed, and how past donations bought influence and favors when she served as Secretary of State. But then the presidential hopeful said they should return donated money to countries known for poor treatment of LGBT individuals, Jewish believers and Christians.
Over the weekend, former Democratic Pennsylvania Gov. Ed Rendell, a Clinton supporter, told The New York Daily News the foundation should be disbanded if she's elected.
Regardless of the outcome of the election, September's Clinton Global Initiative annual meeting in New York-timed to coincide with the United Nations General Assembly-will be its last, the former president, who turns 70 on Friday, said.