The ban faced a series of legal challenges and never came into force.
Instead, the US Department of Commerce will now review apps designed and developed by those in "the jurisdiction of a foreign adversary", such as China.
It should use an "evidence-based approach" to see if they pose a risk to US national security, Mr Biden said.
TikTok did not offer comment on the news.
Mr Trump ordered the ban on new downloads of the viral video app TikTok, which is owned by Chinese firm Bytedance, in 2020.