The new Conservative-Liberal Democrat coalition government plans to cancel the £5 billion ID card programme, calling it part of a "substantial erosion of civil liberties" that took place under the former Labour government.
In their agreement, the parties have also agreed to scrap the National Identity Register, a computer system storing information from biometric passports and ID cards under development by the UK's Identity and Passport Service and UK Border Agency.
They will also cancel the "next generation of biometric passports" and the Contact Point database, which stores information on vulnerable children and teenagers.
Labour's ID card project was the subject of frequent criticism as privacy activists saw the programme as overly expensive, fraught with security risks and violated people's personal liberties. Labour contended the programme would allow for tighter control over immigration and help fight crime and terrorism.
ID cards were launched in November 2008, with the Border Agency issuing ID cards to foreign nationals who came to the UK to work or study. Starting this year, people could voluntarily receive the card. The former government had also planned to issue the ID when people renewed their passport. The new passports would contain biometric information.
But the programme will be frozen. A spokesman for the Home Office said on Friday more detail on how the programme would proceed would be available within two weeks.
The Home Office's Identity and Passport Service said on its website that "applications can continue to be made for ID cards but we would advise anyone thinking of applying to wait for further announcements."
"Until Parliament agrees otherwise, identity cards remain valid and as such can still be used as an identity document and for travel within Europe," the agency said.
One way to cancel the programme would be to repeal the Identity Cards Act, passed in 2006, said Michael Parker, press officer for NO2ID, which has campaigned against the programme.
"I suppose really we just remain hopeful that the coalition will continue to look not just at identity cards and schemes that back it but the wider tranche of deeply invasive and problematic schemes that the government has brought up in the last 10 years," Parker said.