The cancellation of the ban prompted sharp criticism from Congress and human rights groups.
The Cluster Munition Coalition also condemned the change, calling the decision "shocking".
Senator Patrick Leahy, a Democrat who has helped lead efforts to restrict use of cluster bombs, said the Pentagon was "perpetuating use of an indiscriminate weapon that has been shown to have high failure rates".
Over 100 countries, including most members of North Atlantic Treaty Organisation, have called for a ban on the controversial weapon and human rights groups have expressed concerns over civilian casualties resulting from cluster bombs.
In 2008 then-Secretary of Defense Robert Gates ordered the military to cease using older types of cluster bombs by January 1, 2019, and to retain only newer versions of the bombs that explode at least 99% of the time or have advanced safeguards that would automatically defuse unexploded ordnance, reducing the risks of injuring civilians.
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Mary Wareham, arms division director for Human Rights Watch, said there is no compelling reason for the use of cluster munitions. Crosson said the military remains committed to "acquiring safer and more reliable weapons". "We condemn this decision to reverse the long-held USA commitment not to use cluster munitions that fail more than one per cent of the time, resulting in deadly unexploded submunitions".
He said it's unclear how long it might take to achieve that standard, and thus the Pentagon concluded in a months-long policy review that it should set aside the 2019 deadline and allow commanders to authorize the use of the weapons when they deem it necessary. Amnesty International documented a 2010 U.S. attack on Yemen which apparently used cluster bombs and killed 41 civilians including 21 children.
'The aftermath of the use of cluster munition use in Laos is particularly painful, with estimates of as many as 300 people killed every year, even 40 years after the war's end'.
The US has used cluster munitions in Cambodia, Laos, Vietnam, Grenada, Lebanon, Libya, Iran, Iraq, Kuwait, Saudi Arabia, Bosnia and Herzegovina, Serbia (including Kosovo), Montenegro, Afghanistan and Iraq.
Pentagon officials don't know when a safer cluster bomb will become available, but after a months-long policy review, chose to shelve the 2019 deadline.
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Such weaponry must meet a series of criteria, including having a way to render submunitions inoperable within 15 minutes of being armed. The "dud rate" refers to the percentage of bomblets that on average fail to explode on impact, leaving large areas strewn with potentially lethal unexploded munitions. The policy does not define what a sufficient quantity would be.
'Although the (Defense) Department seeks to field a new generation of more highly reliable munitions, we can not risk mission failure or accept the potential of increased military and civilian casualties by forfeiting the best available capabilities, ' Shanahan wrote.
In practice, the USA rarely uses cluster bombs.
The memo, which was expected to be signed by Deputy Defense Secretary Patrick Shanahan on Thursday, called cluster munitions "legitimate weapons with clear military utility". In its place, a vague policy created to keep "legitimate weapons with clear military utility" in use.
The policy states that cluster munitions that do not meet the procurement standards will be removed from active weapons inventories and disarmed once they can be replaced by munitions that meet the procurement policy. The law also prohibits exporting cluster bombs that did not meet the 1 percent standard.
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