A small subspecies of Mexican wolves in the Southwest will retain the endangered species protections.
The FWS said its comprehensive review of the gray wolf population showed the current protections "erroneously included large geographical areas outside the species’ historical range."
The proposal is open to a 90-day comment period once it’s entered into the Federal Register.
Several states with gray wolf populations, such as Colorado, North Dakota, Oregon, Utah and Washington, supported the move.
"Oregon is ready to take on further responsibility for wolf management in this state,” Roy Elicker, director of the Oregon Department of Fish and Wildlife, said in a statement.
But the decision also drew criticism from green and conservation groups.
"Wolf recovery has been one of our greatest Endangered Species Act success stories, but stopping now before the population is fully recovered will negate the decades of hard work that have gone into bringing wolves back from the brink of extinction. Without federal protections this symbol of our wild heritage will slide back into harm's way,” Sierra Club Executive Director Michael Brune said in a statement.