Thousands of combined ground, air, naval and special operations troops take part in the Foal Eagle field exercise, while Key Resolve is a computer-simulated exercise.
"The US has identified ways to mitigate potential readiness concerns by looking at required mission tasks versus having to conduct large-scale exercises," the NBCNews quoted the official as saying.
Meanwhile, some experts on North Korea cast doubt on the new approach, arguing that suspension of the major exercises could significantly affect the troops' ability to combat threats.
“That would run counter to what the military has been saying for decades,” said Bruce Klingner, a former CIA officer who tracked North Korea and is now a senior fellow at the Heritage Foundation. “Militaries need to train.”
“If you continue curtailing your exercises, on what day has it reached catastrophic proportions?" Klingner added. "It's hard to measure. But you know, over time, there has to be a degradation."
The news comes two days after the second summit between US President Donald Trump and North Korean leader Kim Jong-un in Hanoi, Vietnam, although the US official said the decision had been made some time before the meeting.
Washington and Seoul have suspended a number of military drills since the first summit between Trump and Kim last year in order to encourage negotiations with Pyongyang.
Trump has repeatedly called for an end to the large-scale exercises, saying they cost the US dearly.
Speaking with reporters after his second meeting with Kim, Trump said military exercises were "very, very expensive."
"I was telling the generals, I said: Look, you know, exercising is fun and it's nice and they play the war games. And I'm not saying it's not necessary, because at some levels it is, but at other levels it's not," Trump said.
According to the Pentagon, another exercise known as Freedom Guardian, which was suspended last year, would have cost approximately $14 million.