The new policy allows the use of sophisticated, or "smart" landmines that can be automatically defused within days, marking a retreat from the pledge to ban all landmines by 2006 if the Pentagon was able to develop alternatives.
It would ban after 2010 "dumb" mines that cannot self-destruct and pose a risk long after battlefields return to peaceful use.
The US, which has refused to sign a global landmine treaty, has long been criticised for its mine policies and Friday's announcement brought a sharp response.
"This new land mine policy is not just a gigantic step backward for the United States, it is a complete about-face," said Stephen Goose, executive director of the arms division of Human Rights Watch.
The charity Land Mine Action added: "While 141 countries around the world - including all other Nato countries - have now banned landmines, the US is choosing to continue to use this outmoded and indiscriminate weapon that kills and injures thousands of people every year."
US President George Bush's special representative for mine action, Lincoln Bloomfield, announcing the decision at the State Department, said it aimed to strike a balance between the need to retain effective weapons and humanitarian concerns.
Mines around the world posed a risk for 60 million civilians and "dumb" mines caused an estimated 10,000 casualties a year, he said.
Patrick Leahy, a Vermont Democrat, called the new policy a "deeply disappointing rollback" and said it would serve to encourage other militaries to continue using mines.
"The world looks to us for leadership on this issue. When we back away from the progress we have pledged to rid the world of these indiscriminate weapons, others will ask why they, with their much weaker armies, should stop using them"
"The world looks to us for leadership on this issue," Leahy said.
"When we back away from the progress we have pledged to rid the world of these indiscriminate weapons, others will ask why they, with their much weaker armies, should stop using them."
The Bush plan also proposes a 50% increase, up to $70 million, for a State Department programme that provides landmine removal assistance in more than 40 countries.
The British landmine charity Halo Trust, championed by the late Princess Diana, welcomed that move, saying the pledge of more money to dig up mines was the best way to save lives.
The United Nations says the 1997 international treaty banning landmines has steadily reduced their use and the dead and maimed they claim each year.
A few dozen countries, including the United States, China and Russia, remain outsiders to the treaty, which commits countries never to use, develop, produce, stockpile or transfer anti-personnel mines.
"The US policy sets a dangerous example to other countries like Russia, India and Pakistan that still use landmines," Landmine Action said.
Human Rights Watch said the policy change meant US forces were free to use smart mines indefinitely.
"So-called smart mines are not safe mines, they still pose real dangers for civilians," Goose said.
"The United States stands alone in this position that there can be a technological solution to the global landmine problem."