A new policy, to be implemented in 60 days, will not limit how long children or their families can be detained.
The move is aimed at deterring migrant expectations that they will be released after being arrested by the US border authorities and able to disappear into the US population.
"To protect these children from abuse, and stop this illegal flow, we must close these loopholes. This is an urgent humanitarian necessity," Mr Trump said in a statement.
Kevin McAleenan, the acting DHS secretary, cited the challenge of "an unprecedented flow of family units" crossing the southern US border this year, most of them from Central America.
The Flores Settlement "has generally forced the government to release families into the country after just 20 days, incentivising illegal entry," he said.
"Human smugglers advertise, and intending migrants know well, that even if they cross the border illegally, arriving at our border with a child has meant that they will be released into the United States to wait for court proceedings that could take five years or more."
Ending 20-day detention limit
The Flores rule was the result of a lawsuit citing chronic abuse of migrants in detention.
It required they receive adequate, humane care and that migrant children would have to be released within 20 days and placed in the custody of their parents or relatives.
Faced with tens of thousands of mostly Central American migrant families and unaccompanied children crossing the border every month, Trump's administration has been accused of violating Flores conditions and also separating children from their parents who remained held in order to meet the 20-day requirement.
Mr McAleenan said that in the 10 months to July, some 475,000 people in family units crossed the border illegally from Mexico, aiming to stay in the United States.
DHS said new rules would guarantee that Flores standards of detention would be upheld but allow authorities "to maintain family unity."
New regulations to be announced would be "a pathway to ensure the humane detention of families while satisfying the goals" of the Flores Settlement, DHS said.
Migrant and human rights groups said they would challenge the abrogation of Flores and accused the government of mistreating migrants.
"This is yet another cruel attack on children, who the Trump administration has targeted again and again with its anti-immigrant policies," American Civil Liberties Union official Madhuri Grewal.
"The government should not be jailing kids, and certainly shouldn't be seeking to put more kids in jail for longer," she said.