Ben Cardin, chairman of the Senate Foreign Relations Committee, said he told Secretary of State Antony Blinken that his hold on funds "will remain until specific human rights progress is made."
"I believe it is imperative that we continue to hold the government of Egypt, and all governments, accountable for their human rights violations," Cardin said in a statement.
He said he would withhold the assistance to Egypt if it "does not take concrete, meaningful and sustainable steps to improve the human rights conditions in the country."
Cardin, a member of President Joe Biden's Democratic Party, called specifically for more pardons for some of the estimated 60,000 political prisoners in Egypt.
He also called for major reforms in pre-detention practices and providing more space for the political opposition, civil society and independent media.
The State Department last month approved $1.215 billion in military aid to Egypt for the coming year, its latest major package for Cairo despite Biden's calls to emphasize human rights.
Cardin's action relates to $235 million that Congress linked to human rights. Blinken did not certify that Egypt met the conditions, but he waived the consequent restrictions on aid, citing U.S. national security interests.
Blinken already withheld a separate $85 million that was linked specifically to progress on releasing political prisoners.
But the largest chunk of aid, $980 million, was not subject to restrictions and will go ahead.
A number of Democrats have been critical of aid to Egypt. But Cardin's predecessor, Bob Menendez, was recently indicted on allegations that he accepted hundreds of thousands of dollars in bribes in exchange for exerting his influence to benefit Egypt.
Menendez, also a Democrat, has denied the charges and refused to resign but stepped aside from the chairmanship of the Senate Foreign Relations Committee.
Egypt has seen a decade-long crackdown under President Abdel Fattah al-Sissi, a former military ruler who announced Monday he would seek a third elected term.
A coalition of six rights groups in a recent report said that Egypt's "widespread and systematic" use of torture amounted to a crime against humanity.
The Biden administration, while acknowledging concerns over human rights, has found Egypt a vital interlocutor between Israel and the Palestinian militant group Hamas. Egypt is also a major player in its troubled neighbors Libya and Sudan.
Egypt has been one of the largest recipients of U.S. military aid after it became the first Arab state to normalize relations with Israel, in 1980.