The program does not target Americans' location data, but the agency collects some domestic data "incidentally," the Post reported.
The NSA uses a tool called CO-TRAVELER to analyze the nearly 5 billion records that are collected every day through the program.
Greg Nojeim, an attorney at the Center for Democracy and Technology, said location data can reveal "with whom you associate, where you live, the places you visit, and your movements throughout the day."
"It can also show if you attended a political protest or visited a medical clinic," he said. "Cell phone location tracking has profound implications on privacy and potential chilling effects on the right to association."
The NSA sifts through the data looking for people who might be meeting with known intelligence targets. Using encryption tools or only turning on a phone to make calls flags the phone for special scrutiny, the Post reported.
The NSA gathers the data by tapping into the cables that connect cellular networks, according to the leaked documents.
NSA Director Gen. Keith Alexander admitted at a Senate hearing earlier this year that the agency collected some Americans' cellphone location data in bulk as a part of a secret pilot program in 2010 and 2011.
Alexander said during the hearing that the agency no longer collects domestic cellphone location data in bulk.
"This may be something that would be a future requirement for the country, but it is not right now," he said.
Robert Litt, general counsel for the Office of the Director of National Intelligence, told the Post that “there is no element of the intelligence community that under any authority is intentionally collecting bulk cellphone location information about cellphones in the United States.”
Privacy groups argued that the latest leak shows the need for Congress to pass legislation to limit the NSA's power and tighten oversight.
"The dragnet surveillance of hundreds of millions of cell phones flouts our international obligation to respect the privacy of foreigners and Americans alike," Catherine Crump, an attorney for the American Civil Liberties Union, said.
—Updated at 6:44 p.m.