Trump's order will restore local law enforcement agencies' access to camouflage uniforms, bulletproof vests, riot shields, firearms, ammunition and other items, officials said.
"It will benefit law enforcement across the country," said Chicago Police Supt. Eddie Johnson. "The important thing to remember is that equipment like that should only be used in isolated incidents."
Attorney General Jeff Sessions announced the president's action in a speech at the biennial conference of the National Fraternal Order of Police, which endorsed the Republican during the 2016 presidential campaign.
Chicago Police Department spokesman Anthony Guglielmi could not immediately respond to a question about what the president's action would mean for the department.
Obama's 2015 order — prompted by the outrage that erupted after police responded with tanks to protests in Ferguson, Mo., — went too far, Sessions said.
"We will not put superficial concerns above public safety," Sessions said.
The protests were prompted by the death of 18-year-old Michael Brown, who was killed by a police officer.
Obama's order forced law enforcement agencies to return grenade launchers, bayonets, tracked armored vehicles, weaponized aircraft and vehicles as well as firearms and ammunition of .50-caliber or greater to police.
The NAACP Legal Defense Fund criticized Trump's order, calling it "exceptionally dangerous and irresponsible," especially in Black and Latino communities.
Law enforcement agencies have urged federal officials to allow them access to the equipment to prepare for and respond to active-shooter calls and terrorist attacks.