WASHINGTON (AP) Obama will announce the move in a highly anticipated speech at the Justice Department. However, the official said Obama will not recommend who should control the phone data and will instead call on the attorney general, intelligence community and Congress to make that determination.
A presidential review panel has recommended moving the data to the telephone companies or a third party. However, the phone providers have balked at changes that would put them back in control of the records.
The official said Obama will also take steps to modify the program - known as Section 215 of the USA Patriot Act - to require a judicial finding before the phone record database can be accessed.
The move is more sweeping than what many U.S. officials had been anticipating about the president's surveillance decisions. It's expected to be met with pushback from some in the intelligence community, who have been pressing Obama to keep the surveillance programs largely intact.
The official insisted on anonymity because this person was not authorized to discuss the president's decisions, by name, ahead of his speech.
Reacting to reports of Obama's plan, retired Gen. Michael Hayden, a former NSA director, said "no one will hold it (the phone data) as well."
Appearing on NBC's "Today" show Friday, Hayden said there has been "serious, irreversible harm to the ability" of the National Security Agency to collect intelligence. Obama's review of the nation's surveillance apparatus was spurred by disclosures about the government's sweeping surveillance programs by former National Security Agency analyst Edward Snowden.
But the president's address may leave many questions about reforms to the surveillance programs unanswered. He was expected to recommend further study on several of the 46 recommendations he received from a presidential review group, including ideas for expanding privacy protections to foreigners.
Obama is also expected to call for the creation of an independent privacy advocate on the secretive court that approves the phone record collections. The court currently hears arguments only from the government.
While the privacy advocate post has broad support, a U.S. district judge this week panned the recommendation as unnecessary and possibly counterproductive.
Many of the changes Obama was expected to announce appeared aimed at shoring up the public's confidence in the spying operations. That included a move to add an independent privacy advocate to the secretive court that approves the phone record collections.
In previewing Obama's speech, White House spokesman Jay Carney had said Thursday the president believed the government could make surveillance activities "more transparent in order to give the public more confidence about the problems and the oversight of the programs."
But officials acknowledged that even after months of studying the surveillance issues, Obama was still grappling with his decisions in the hours leading up to the speech.
Obama's strategy, among other things, would leave many of the specifics of intelligence-gathering changes to Congress.
This would thrust the decision-making into the hands of lawmakers, who are at odds over the future of the surveillance programs, raising questions about how quickly change would come, if it comes at all. The officials spoke on condition of anonymity because they were not authorized to discuss the review by name ahead of Obama's speech.
Privacy groups have been pressing for guidelines that significantly narrow the amount of data collected from Americans. But the officials were banking on broad rules that do little to actually limit their activities.
The president also was expected to announce changes in U.S. surveillance operations overseas, including ratcheting up oversight to determine whether the government will monitor communications of friendly foreign leaders.
The leaks from Snowden, a fugitive now living in Russia, included revelations the U.S. was monitoring the phone of German Chancellor Angela Merkel, sparking intense anger in Europe.