EPA Administrator Andrew Wheeler announced the decision at an event in Washington, D.C. on Thursday, following years of controversy surrounding the issue.
“Today’s Step 1 action fulfills a key promise of President Trump and sets the stage for Step 2 – a new WOTUS definition that will provide greater regulatory certainty for farmers, landowners, home builders, and developers nationwide," Wheeler said, according to the EPA.
Conservatives have criticized the rule for its expansive definition of "navigable waters" subject to regulation by the federal government.
The rule has been a target since the beginning of President Trump's first term. In 2017, he signed an executive order directing the agency to reconsider the rule and abide by Supreme Court Justice Antonin Scalia's plurality opinion in a case on the issue.
That ruling, in Rapanos vs. United States, restricted the federal government's regulatory authority to bodies of water with a somewhat permanent flow. According to the National Federation of Independent Businesses, the Obama-era rule gave the EPA authority over bodies of "seasonal streams, ponds, ditches, and even depressions fields that are dry through most of the year."
Daren Bakst, a senior research fellow at the Heritage Foundation, similarly described the rule as a "power grab" in a statement provided to Fox News on Thursday.
“In an unprecedented power grab, this rule handed federal bureaucrats authority to regulate almost any water imaginable—creating unnecessary regulatory obstacles for everyone from farmers plowing their land to local governments building ditches for public safety to families building their homes," Bakst argued.
While it's unclear exactly what the new rule will say, environmental groups have panned the idea as a threat to the nation's waterways. When the EPA announced in December that it would publish the new rule, House Speaker Nancy Pelosi, D-Calif., warned that it would pollute drinking water.
“The President’s Dirty Water Rule will pollute and poison the clean drinking water of tens of millions of families and communities. Yet again, this Administration has sold out our children to further enrich its big corporate polluter friends,” she said.
The Natural Resources Defense Fund has threatened a lawsuit over the issue.
"The Clean Water Rule represented solid science and smart public policy," the environmental group said in a statement. "Where it has been enforced, it has protected important waterways and wetlands, providing certainty to all stakeholders."
Wheeler argued in December that the agency's revised definition restored power to states and provided greater clarity for landowners.
"It would end years of uncertainty over where federal jurisdiction begins and ends. For the first time, we are clearly delineating the difference between federally protected wetlands and state-protected wetlands," he said.
He added that the clearer definition would help landowners avoid thousands of dollars in compliance costs.
The Associated Press and Fox News' Gregg Re contributed to this report.