President Barack Obama on Friday announced he was ordering a transition that will end the National Security Agency bulk telephone metadata collection program as it currently exists, and establish a mechanism that preserves needed security capabilities without the government holding the bulk meta-data. "Effective immediately, we will only pursue phone calls that are two steps removed from a number associated with a terrorist organization instead of three, and I have directed the Attorney General to work with the Foreign Intelligence Surveillance Court so that during this transition period, the database can be queried only after a judicial finding, or in a true emergency, " Obama said in a speech at the U.S. Justice Department. "Next, I have instructed the intelligence community and Attorney General to use this transition period to develop options for a new approach that can match the capabilities and fill the gaps that the Section 215 program was designed to address without the government holding this meta-data," Obama said. "They will report back to me with options for alternative approaches before the program comes up for reauthorization on March 28. During this period, I will consult with the relevant committees in Congress to seek their views, and then seek congressional authorization for the new program as needed." "The reforms I am proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe," he said. Obama also announced changes in the controversial overseas surveillance programs. A presidential directive "makes clear that the United States only uses signals intelligence for legitimate national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary people," the President said. "I have also made it clear that the United States does not collect intelligence to suppress criticism or dissent, nor do we collect intelligence to disadvantage people on the basis of their ethnicity, race, gender, sexual orientation or religious beliefs, and we do not collect intelligence to provide a competitive advantage to U.S. companies or U.S. commercial sectors," he said. In terms of U.S. bulk collection of signals intelligence, U.S. intelligence agencies will only use such data to meet specific security requirements: counter-intelligence; counter-terrorism; counter-proliferation; cyber-security; force protection for U.S. troops and allies; and combating transnational crime, including sanctions evasion, he said. "Moreover, I have directed that we take the unprecedented step of extending certain protections that we have for the American people to people overseas," he said. "I have directed the DNI (director of National Intelligence), in consultation with the Attorney General, to develop these safeguards, which will limit the duration that we can hold personal information while also restricting the use of this information." "The bottom line is that people around the world - regardless of their nationality - should know that the United States is not spying on ordinary people who do not threaten our national security, and that we take their privacy concerns into account," Obama said. "This applies to foreign leaders as well." Obama also said his administration will review decisions about intelligence priorities and sensitive targets on an annual basis "so that our actions are regularly scrutinized by my senior national security team. " "Second, we will reform programs and procedures in place to provide greater transparency to our surveillance activities, and fortify the safeguards that protect the privacy of U.S. persons," he said. "Going forward, I am directing the director of National Intelligence, in consultation with the Attorney General, to annually review, for the purpose of declassification, any future opinions of the (Foreign Intelligence Surveillance) Court with broad privacy implications, and to report to me and Congress on these efforts," Obama said. "To ensure that the Court hears a broader range of privacy perspectives, I am calling on Congress to authorize the establishment of a panel of advocates from outside government to provide an independent voice in significant cases before the Foreign Intelligence Surveillance Court." "Third, we will provide additional protections for activities conducted under Section 702, which allows the government to intercept the communications of foreign targets overseas who have information that is important for our national security," he said. "Specifically, I am asking the Attorney General and DNI to institute reforms that place additional restrictions on government's ability to retain, search and use, in criminal cases, communications between Americans and foreign citizens incidentally collected under Section 702." Fourth, in investigating threats, the FBI also relies on National Security Letters, which can require companies to provide specific and limited information to the government without disclosing the orders to the subject of the investigation, the President noted. Obama said he had directed the Attorney General "to amend how we use National Security Letters so this secrecy will not be indefinite, and will terminate within a fixed time unless the government demonstrates a real need for further secrecy. We will also enable communications providers to make public more information than ever before about the orders they have received to provide data to the government." U.S. intelligence agencies will continue to gather information about the intentions of governments, as opposed to ordinary citizens, around the world in the same way that the intelligence services of every other nation does, he said. "We will not apologize simply because our services may be more effective, but heads of state and government with whom we work closely, and on whose cooperation we depend, should feel confident that we are treating them as real partners," he said. "The changes I have ordered do just that." The State Department will designate a senior officer to coordinate U.S. diplomacy on issues related to technology and signals intelligence, Obama said. "We will appoint a senior official at the White House to implement the new privacy safeguards that I have announced today," he said. "I will devote the resources to centralize and improve the process we use to handle foreign requests for legal assistance, keeping our high standards for privacy while helping foreign partners fight crime and terrorism." White House counselor John Podesta will lead a comprehensive review of big data and privacy, the President said. "This group will consist of government officials who, along with the President's Council of Advisers on Science and Technology, will reach out to privacy experts, technologists and business leaders, and look at how the challenges inherent in big data are being confronted by both the public and private sectors; whether we can forge international norms on how to manage this data; and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security," he said.