In an election-year move hailed by South Asian, Latino and other immigrant organisations, President Barack Obama announced that his administration will stop deporting talented young illegal immigrants if they pose no criminal or security threat.
The changes caused by his executive order will make immigration policy "more fair, more efficient and more just," he said in a White House address on Friday afternoon earning praise from Latino leaders but outrage from opposition Republicans.
"This is not amnesty. This is not immunity. This is not a path to citizenship. It's not a permanent fix," Obama said answering his critics. "This is a temporary stopgap measure."
Noting children of illegal immigrants "study in our schools, play in our neighbourhoods, befriend our kids, pledge allegiance to our flag," Obama said, "It makes no sense to expel talented young people who are, for all intents and purposes, Americans."
Under the new policy, people younger than 30 who came to the United States before the age of 16, pose no criminal or security threat, and were successful students or served in the military, can get a two-year deferral from deportation.
It also will allow those meeting the requirements to apply for work permits, Homeland security secretary Janet Napolitano said.
The change is part of a department effort to target resources at illegal immigrants who pose a greater threat, such as criminals and those trying to enter the country now, she said.
Republicans who have blocked Democratic efforts on immigration reform immediately condemned the move with Obama's likely Republican presidential opponent Mitt Romney saying the issue needs more substantive action than an executive order, which can be replaced by a subsequent president.
But members of the National Coalition of South Asian Organizations (NCSO), a network of 42 organizations, applauded Obama's announcement.
"South Asian youth and families stand to benefit from this change in policy, given that individuals from South Asian countries are among the one million undocumented students in the United States," it said.
The Council on American-Islamic Relations (CAIR), America's largest Muslim civil liberties and advocacy organization, also welcomed Obama's decision.
The move addresses a major concern of the Hispanic community which has been upset over an overall increase in deportations under Obama with some 400,000 illegal immigrants removed last year, the largest in US history.