US prosecutors say a "third party" has offered a possible method for decrypting a smartphone used by a terrorist. The FBI and Apple were due in court on Tuesday in a row over criminal evidence held on phones.
A federal judge in California agreed late Monday to the government's request to postpone a hearing so that the FBI could try the newly discovered technique.
In a court filing, federal prosecutors said that an unidentified "outside party" had demonstrated to the FBI a possible way to unlock San Bernardino shooter Syed Farook's iPhone.
Justice Department spokeswoman Melanie Newman said the government was "cautiously optimistic" that it would be able to recover data from the device.
The Justice Department agreed to update the court on its progress on April 5.
The new development may help avert a full-blown showdown between the US government and the world's most valuable company that could have wide ramifications for digital security and privacy.
Last month, the Justice Department obtained a court order directing Apple to write new software that would disable the password protection on Farook's phone.
The FBI says the device may contain critical information for its probe into the December 2 shooting that left 14 people dead.
Farook and his Pakistani-born wife Tashfeen Malik died in a firefight with police after the mass shooting. Two other cell phones linked to the couple were found destroyed.
But Apple has argued that the order was an overreach by the government and would undermine digital security for the public. Apple has won popular support and seen sales for its iPhones rise, while privacy advocates have hailed the apparent drawback as a win for encryption.
"With the FBI backing down on this case, this is, at least, a short-term win for Apple," the Center for Democracy and Technology said in a statement.
On Monday, Apple unveiled a new line of iPhone and iPads, but took the opportunity to reaffirm its commitment to users' privacy.
"We believe strongly we have an obligation to help protect your data and your privacy. We owe it to our customers. We will not shrink from this responsibility," CEO Tim Cook said from Apple headquarters.
Other tech giants and civil rights advocates have warned that if the case goes beyond just one phone, it would open a "Pandora's Box" for human rights and digital security.
Later on Monday, a lawyer for Apple said the company had no information about what technique the government may use to access the phone, but hoped officials would share information about any vulnerability of the iPhone.