US President Barack Obama is planning to ask the Congress to end bulk collection of phone records by the National Security Agency (NSA) in the country.
Phone records of the US citizens would instead remain with telecom companies, only to be accessed by the government in need, The New York Times reported.
The move came after widespread anger at home and abroad after Edward Snowden leaked a revelation of the full extent of US surveillance operations.
According to the New York Times report, Barack Obama told the US justice department and intelligence officials to come up with a plan by 28 March.
From now on, phone companies will swiftly provide records in a technologically compatible data format on a continuing basis about any new calls placed or received after a surveillance order is received.
Those companies would not be required to hold on to the data longer than they normally would, the report said.
The new proposal "would retain a judicial role in determining whether the standard of suspicion was met for a particular phone number before the NSA could obtain associated records", the newspaper adds.
The Obama administration plans to renew the current NSA programme for at least another 90 days until Congress passes the new legislation.
New legislation has also been developed separately by leaders of the House intelligence committee that would allow the NSA to issue subpoenas for specific phone records without prior judicial approval, the New York Times reports.
The New York Times report does not provide information on possible changes to the NSA's surveillance of phone records from other countries.
In January, President Obama offered assurances to non-Americans, saying people around the world "should know that the United States is not spying on ordinary people who don't threaten our national security".
It was revealed last year that the US had spied on friendly foreign leaders, including on the personal mobile of German Chancellor Angela Merkel.
But President Obama has defended the use of data, saying it had protected against terrorist attacks at home and abroad, and insisted nothing he had seen indicated US intelligence operations had sought to break the law.
Edward Snowden, who was behind the leaked the information, is wanted in the US for espionage and is now living in exile in Russia.
Civil liberties groups see him as a hero for exposing what they see as official intrusions into private lives, but many Americans believe he has endangered American lives.