The guidance, issued by his predecessor Barack Obama, had been hailed by as a victory for transgender rights.
But critics said it threatened other students' privacy and safety, and should be decided at state level.
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| Transgender activists and supporters protest potential changes by the Trump administration in federal guidelines issued to public schools in defense of transgender student rights, near the White House in Washington, U.S. February 22, 2017. REUTERS/Jonathan Ernst |
Mr Obama's directive had sparked a backlash across the country, with legal challenges from 13 states.
The latest change will have no immediate impact, because Mr Obama's directive has already been temporarily blocked by a judge in Texas since August.
On Wednesday, the Trump administration sent a letter to US schools outlining the change, saying the previous measure had caused confusion.
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| Transgender activists and supporters protest potential changes by the Trump administration in federal guidelines issued to public schools in defense of transgender student rights, near the White House in Washington, U.S. February 22, 2017. REUTERS/Jonathan Ernst |
It had also sparked lawsuits and debate over how it should work in practice, the letter from the Justice and Education departments said.
Last May, Mr Obama's justice and education departments instructed public schools to allow transgender students to use whichever bathroom corresponded to their gender identity.
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| Transgender activists and supporters protest potential changes by the Trump administration in federal guidelines issued to public schools in defense of transgender student rights, near the White House in Washington, U.S. February 22, 2017. REUTERS/Jonathan Ernst |
Though not legally binding, Mr Obama's order warned schools they could lose funding if they did not follow the new guidance.
The Obama administration's guidance was based on its interpretation of Title IX, the federal law that prohibits sex discrimination in education.
Mr Obama argued that protection extended to gender identity.
During his presidential campaign, Mr Trump said transgender students should be allowed to use whichever bathroom "they feel is appropriate".
But he reversed his stance after facing Republican criticism.
