The government's action on Thursday was a tacit acknowledgement that the law's main goal, getting all students up to speed in reading and math by 2014, is not within reach.
The states excused from following the law no longer have to meet that deadline. Instead, they had to put forward plans showing they will prepare children for college and careers, set new targets for improving achievement among all students, reward the best performing schools and focus help on the ones doing the worst.
Obama said he was acting because Congress had failed to update the law despite widespread agreement it needed to be fixed.
"We've offered every state the same deal," Obama said. "If you're willing to set higher, more honest standards than the ones that were set by NoChild Left Behind, then we're going to give you the flexibility to meet those standards."
The executive action by Obama is one of his most prominent in an ongoing campaign to act on his own where Congress is rebuffing him.
No Child Left Behind was one of President George W. Bush's most touted domestic accomplishments, and was passed with widespread bipartisan support in Congress. It has been up for renewal since 2007. But lawmakers have been stymied for years by competing priorities, disagreements over how much of a federal role there should be in schools and, in the recent Congress, partisan gridlock.