President Barack Obama on Friday lifted restrictions on US government funding for groups that provide abortion services or counselling abroad, reversing a policy of his Republican predecessor George W. Bush.

The Democratic president's decision was a victory for advocates of abortion rights on an issue that in recent years has become a tit-for-tat policy change each time the White House shifts from one party to the other.

When the ban was in place, no US government funding for family planning services could be given to clinics or groups that offered abortion services or counselling in other countries, even if the funds for those activities came from non-US government sources.

"For the past eight years, (the restrictions) have undermined efforts to promote safe and effective voluntary family planning in developing countries," Obama said in a statement.

"It is right for us to rescind this policy and restore critical efforts to protect and empower women and promote global economic development."

In contrast to his executive order to close the US prison at Guantanamo Bay, Cuba, which he signed in a ceremony before journalists, the president issued this order quietly and the White House released a statement.

The decision has been called the Mexico City Policy because it was unveiled at a UN conference there in 1984 and became one of the centrepiece social positions of the administration of then-President Ronald Reagan, a Republican.

Critics call it the 'gag rule' because it cuts funds to groups that advocate lifting abortion restrictions, which critics say means it blocks free speech. They say it reduced healthcare for some of the world's poorest women.

Planned Parenthood, a health care provider and advocacy group for abortion rights, welcomed the move in a statement.

"No longer will health care providers be forced to choose between receiving family planning funding and restricting the health care services they provide to women," it said.

Anti-abortion activists criticised Obama.