The White House proposes to halt the bulk collection of telephone data from Americans by the the National Security Agency, a programme that sparked a vast public outcry.
Instead, it intends to store the data outside of government while allowing access for national security reasons.
President Barack Obama said the plan addresses the core concerns people have about the NSA's surveillance.
He said there were clear safeguards against any abuse of the NSA's authority, but added:
"I recognise that people were concerned about what might happen in the future with that bulk data.
"So, overall, I am confident that it allows us to do what is necessary in order to deal with the dangers from a terrorist attack, but does so in a way that addresses some of the concerns that people had raised."
Documents leaked by fugitive former NSA contractor Edward Snowden who is now in Russia, sparked outrage in the United States and abroad about the vast capabilities of America's intelligence programmes.