The decision was left with the outgoing President Biden after a US government panel failed to reach a consensus in late December on whether the acquisition by Nippon Steel may threaten Washington’s national security.
Biden was legally required to act within a 15-day deadline, after the deadlock by the Committee on Foreign Investment in the United States (CFIUS).
He has repeatedly criticised the deal, joining other US politicians who have called the transaction into question.
They include President-elect Donald Trump and the incoming vice-president, JD Vance.
The deal became caught up in the 2024 US presidential campaign when Pennsylvania emerged as a critical swing state and leaders of the United Steelworkers union loudly opposed it.
Nippon Steel has previously described the transaction as a lifeline to Pennsylvania’s much-diminished steel industry in the past.
The Japanese company and US Steel have also previously suggested they may pursue legal action against the government if the deal did not happen.