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.
He described it at the time as a threat to national security.
A proposal was produced that would have seen Oracle and Walmart owning a US entity of the service, and taking responsibility for handling TikTok's US user data and content moderation.
But a series of legal challenges, and the fact Mr Trump was due to leave office shortly afterwards, meant neither the ban nor the involvement of the US companies ever came to fruition.