Observers say the decision was prompted by whistle-blower Edward Snowden's recent revelations, and that the subsequent backlash may have forced the Government to relinquish its historical control over the administration of the internet. As Rob Atkinson of the Information Technology and Innovation Foundation, a Washington DC think-tank, put it, the US is "giving up its traditional bodyguard role of internet governance".
The internet was developed as a US Defence Department initiative during the 1960s, and it remained an American project even as it grew into a global consumer tool.
To maintain a unified, worldwide web, a single master list of web addresses was created, the Domain Name System (DNS). Jon Postel, a computer scientist at the University of California in Los Angeles, was the first person responsible for DNS, earning him the nickname "God".
When Postel died in 1998, the Commerce Department created Icann, a non-profit body based in Los Angeles which took over control of the web's crucial address list. Although Icann is nominally overseen by a selection of governmental and private "stakeholders", it is under contract from the US Government.
In the short-term, the changes are likely to have little effect on internet users' online experience. But observers say the planned handover is a concession designed to reassure other countries suspicious of the power the US wields over the web.