The Pentagon is scrapping plans for an internet voting system for overseas US citizens to use in November's election.
Internet voting systems are too risky, said the experts
Officials previously defended the e-voting system despite a critical report saying it would not be secure enough.
Deputy Defense Secretary Paul Wolfowitz reportedly took the decision because officials could not "assure legitimacy of votes that would be cast".
The system was due to be tested in last Tuesday's South Carolina primary, but the Pentagon put the plan on hold.
The project was part of the Pentagon's Federal Voting Assistance Program, which was set up in 1986 to help military personnel stationed abroad to vote.
It was thought the $22m Secure Electronic Registration and Voting Experiment (Serve) could allow US troops and civilians living overseas to votes through the internet for November's presidential election.
But in January, four computer experts who reviewed the pilot project said the risks of online voting were too high to proceed with.
"Using a voting system based upon the internet poses a serious and unacceptable risk for election fraud," said the experts.
They went further and recommended the project be shut down and nothing like it be tried until "both the internet and the world's home computer infrastructure have been fundamentally redesigned, or some other unforeseen security breakthroughs appear."
But the Pentagon stood by the project.
"We knew from the start that security would be the utmost concern," said Defense Department spokesman Glenn Flood at the time. "We've had things put in place that counteract the things they talked about."
On Thursday, the US Defense Department changed its mind.
Mr Wolfowitz said in a memo the Pentagon "will not be using the Serve internet project in view of the inability to assure legitimacy of votes that would be cast using the system, which thereby brings into doubt the integrity of election results," according to an anonymous defence official.
Overseas Americans currently rely on absentee paper ballots.