President Donald Trump will no longer pursue adding a question on citizenship to the 2020 US census questionnaire.
Instead, he said he had directed officials to obtain the information through an executive order for government agencies, as court challenges would have delayed a census.
"We will leave no stone unturned," Mr Trump said.
The retreat follows a long fight over the inclusion of the question, which the Supreme Court had blocked in June.
"We are not backing down on our effort to determine the citizenship status of the United States population," the US president said.
The order will require government agencies to hand over documents regarding citizenship.
"As a result of today's executive order we will be able to ensure the 2020 census generates an accurate count of how many citizens, non-citizens and illegal aliens are in the United States of America," Mr Trump said at the White House.
Kristen Clarke, president of the National Lawyers' Committee for Civil Rights Under Law, told the BBC she had concerns about Mr Trump's plans.
"This is essentially an attempt to compile data on a mass scale in a way that is unprecedented," she said. "We don't know how long it will take for them to pull this data together, we don't know what they will do with that data."
What reason did the Trump administration give?
The decision to abandon the citizenship question was a "logistical impediment, not a legal one", said Attorney General William Barr, standing alongside President Trump.
He said there was "ample justification" for the administration to include the citizenship question.
But referring to court injunctions, he said there was no way to "implement any new decision without jeopardizing our ability to carry out the census".
Census questionnaires without the citizenship question are already being printed.
Mr Barr repeatedly congratulated Mr Trump on the executive order.
How did the battle unfold?
At the end of last month, the Supreme Court returned the case to the Census Bureau in a 5-4 ruling that noted the reason for including the question seemed "contrived".
Government lawyers indicated they had dropped the question and officials began printing the 2020 census without it.
But Mr Trump then announced that he might consider an executive order to include the question or find other ways to move forward.
Legal experts noted that an executive order could not override a Supreme Court ruling.-BBC