Decision comes as US president formally ends program to shield up to 5 million from deportation.
The department confirmed the change in a "fact sheet" posted on its website, though the long-term prospects of so-called "dreamers" remaining in the U.S. is unclear.
"The June 15, 2012 memorandum that created the Deferred Action for Childhood Arrivals (DACA) program will remain in effect," the department said in a statement.
The announcement marks yet another departure for Trump from his campaign rhetoric. He maintained a strongly anti-undocumented migrant stance during last year's election campaign, and said he would seek to have them deported.
Upon taking office in January, Trump has been coy as to whether he would seek to remove "dreamers" from the U.S.
But the decision to continue the DACA program comes as Trump decided to officially rescind its Obama-era extension, the "Deferred Action for Parents of Americans", which sought to shield as many as 5 million undocumented migrants from deportation.
After being stalled in the courts, it has yet to go into effect.
The Supreme Court was deadlocked on the program, but Friday's decision formally puts it to an end.