The US government will hold off on designating Mexican drug cartels as terrorist organisations.
President Donald Trump said all necessary work has been completed to make the declaration official.
However at the request of Mexican President Andres Manuel Lopez Obrador, a man Mr Trump says "I like and respect", Washington will temporarily refrain from putting it into effect.
In the meantime the two countries will "step up our joint efforts to deal decisively with these vicious and ever-growing organisations," Mr Trump tweeted on Friday.
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He originally announced the move for a terror designation in November and said at the time Mexican cartels were to blame for 100,000 American deaths.
It came soon after a Mormon family - who were nationals of both the US and Mexico - were killed in an attack in northern Mexico by suspected members of a criminal gang.
The Mexican government said in a statement at the time the country's foreign ministry had been in touch with the US government to ask for the details of the measures mentioned by Mr Trump.
There are currently no designated terrorist groups in Mexico and only one in Latin America, the National Liberation Army insurgent group in Colombia.
