Salvadoreans now have until 2019 to leave otherwise they face deportation.
The Trump administration has already removed TPS protections from tens of thousands of Haitians and Nicaraguans.
Protections for Salvadoreans were set to expire on Monday, after nearly two decades of holding the protected status due to the impacts of natural disaster in their home country.
The Department of Homeland Security plans to allow Salvadoreans until 9 September, 2019 to leave the US or find a legal way to remain in the country.
The protections will not be terminated for another 18 months "to allow for an orderly transition", the Department of Homeland Security said in a statement announcing the decision on Monday.
"The original conditions caused by the 2001 earthquakes no longer exist," the agency said.
"Thus, under the applicable statute, the current TPS designation must be terminated."
What is Temporary Protected Status?
The programme, which was created in 1990, authorises immigrants from several countries to lawfully live and work in the US regardless of whether they entered the country legally or not.
It is only granted to countries affected by armed conflict, environmental disaster, or epidemics.
With nearly 200,000 immigrants in the US, El Salvador represents the largest group of TPS recipients.
Ten countries, making up over 300,000 US immigrants, have been granted TPS protections since it was first signed into law by President George Bush.
Salvadoreans received TPS in March 2001 after two earthquakes killed more than 1,000 people and devastated communities.
Over the next 15 years, the programme was reauthorised by US presidents several times.
What has the reaction been in El Salvador?
The Salvadorean government has been lobbying the US to extend protections for people from their country living in the US.
El Salvador Foreign Minister Hugo Martinez said last week that ending TPS "would mean breaking up families that are in the United States".
He noted that due to the US practice of granted citizenship to babies born inside the United States, there are now nearly 200,000 US citizens who were born to parents who now may face deportation.
Consulates in the US are offering advice to Salvadoreans, and the foreign minister has scheduled a press conference in San Salvador later today.
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