Obama announced he will be issuing a new presidential directive in a public speech, promising a number of key changes regarding how US intelligence agencies collect and examine data.
"Today I am announcing a series of concrete reforms," he said. "First, I have approved a new presidential directive for our intelligence activities at home and abroad. With it we will now review decisions about intelligence priorities on an annual basis."
Obama promised the reform will see a number of changes regarding the way agencies such as the NSA store data and receive clearance to enact missions. "We will reform procedures to provide greater transparency about our intelligence activities," he said.
These include the creation of a new independent, non-governmental panel of advocates to appear at the secret courts that approve or disapprove operations such as PRISM. There will also be fresh restrictions put in place by the attorney general, on how requests using the US Foreign Intelligence Surveillance Act (FISA) and National Security Letters can be made.
FISA and National Security Letters were used by the NSA to force numerous companies, including Google, Yahoo, Apple and Microsoft, to hand over vast amounts of customer data. The nature of the requests means the companies are not allowed to disclose what information was handed over without risking arrest.
Obama promised the reforms would help end this process, but failed to disclose exactly how.
"While investigating threats the FBI relies on National Security Letters that require companies to hand over information to the government. We must be more transparent about this," he said.
"I've ordered the attorney general to amend how we use National Security Letters so this secrecy will not be permanent and will end in time. We will also allow information providers to give more information than ever before about what data they've handed to the government."
Obama said the FISA reforms were an essential step in the government's battle to win back international trust following PRISM.
"The new presidential directive will clearly prescribe what we do and do not do when it comes to our overseas activities. US intelligence agencies will only use such data to meet specific needs," he said.
"We will also develop safeguards and create a time limit on how long we can store personal information. People around the world should know the US is not spying on them."
Obama also said that, despite the reforms being made, at no point did the NSA overstep its bounds. "As president, a president who looks at intelligence every morning I can tell you we need to protect against threats. 9/11 is proof of this," he said.
"The men and women of the intelligence community, including the NSA constantly follow protocols. They're not using their powers to listen to you calls or read your private emails. These people are our friends, our family members, our neighbours."
The US president accused several nations of hypocrisy, arguing that they are only upset because US operations are more sophisticated and effective than their own, promising the nation would continue to mount and develop its cyber operations.
"Many countries, including those that feigned surprise following the Snowden revelations, are trying to penetrate our networks," he said. "Our agencies will continue to gather intelligence on foreign governments' intentions. We will not apologise for doing it better."
The PRISM scandal broke in 2013, when whistleblower Edward Snowden leaked documents to the press detailing the NSA's spying operations. The leaks have continued in a steady stream of revelations. Most recently the NSA was shown to have collected and examined 200 million SMS messages per day in 2011.
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