The FBI says it might have found a way to unlock the iPhone of one of the San Bernadino attackers without Apple's assistance.
A court hearing with Apple scheduled for tomorrow has been postponed at the request of the US Justice Department (DOJ), Apple has confirmed.
The DOJ had ordered Apple to help unlock the phone used by San Bernardino gunman Rizwan Farook.
But Apple has continued to fight the order, saying it would set a "dangerous precedent".
Apple had won an earlier trial, with a federal judge ruling in the tech giant's favour.
Farook and his wife killed 14 people in San Bernardino, California, last December before police fatally shot them.
Prosecutors said "an outside party" had demonstrated a possible way of unlocking the iPhone without the need to seek Apple's help.
"Testing is required to determine whether it is a viable method that will not compromise data on Farook's iPhone," a court filing said.
"If the method is viable, it should eliminate the need for the assistance from Apple."
DOJ spokeswoman Melanie Newman said in a statement that the government was "cautiously optimistic" that the possible method to unlock the phone would work.
The FBI said Farook and his wife, Tashfeen Malik, were inspired by the so-called Islamic State and that the iPhone may contain crucial evidence.
It wants to access the data but the encrypted device can only be unlocked by entering the correct passcode, which was set by the user as a security measure.
Guessing the code incorrectly too many times could permanently delete all data on the phone, so the FBI had asked Apple to develop a new version of its operating system that circumvents some of its security features.
Apple has repeatedly stated that creating a compromised version of the system would have security implications for millions of iPhone users and would set a precedent.
The company has received support from other tech giants including Google, Microsoft, and Facebook, as it resisted a court order to unlock the iPhone.