NSA senior officials told the New York Times the agency would “end its systematic collection of data about Americans’ calling habits”.
Phone records would instead remain with telecoms companies, only to be accessed by government when needed.
It follows widespread anger at home and abroad after leaks revealed the full extent of US surveillance operations.
The documents – leaked by former NSA contractor Edward Snowden – revealed that the US collects massive amounts of electronic data from communications of private individuals around the world, and has spied on foreign leaders.
In a speech in January, Barack Obama said it was necessary for the US to continue collecting large amounts of data, but that civil liberties must be respected.
He said the current system, in which the NSA collects the details of the times, numbers and durations of phone calls, known as metadata, would come to an end.
According to the New York Times report, Barack Obama told the US justice department and intelligence officials to come up with a plan by March 28.
Under the new proposal, officials say surveillance “would require phone companies to swiftly provide records in a technologically compatible data format, including making available, on a continuing basis, data about any new calls placed or received after the order is received”.
The phone companies would not be required to hold on to the data for longer than they normally would, the New York Times says.
The NSA currently holds information for five years, whereas telecoms companies are required by federal regulation to retain customer records for 18 months.
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 program 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.
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