"The CHA received a tremendous amount of feedback during the public comment period, and simply, the result of that is the CHA will not move forward," CHA spokesperson Kellie O'Connell-Miller told the paper.
The drug testing policy would have impacted anyone 18 or older who lives in or applies to move into Chicago's public housing.
The CHA would have started eviction proceedings for any resident with a positive test.
The Central Advisory Council, which consists of CHA tenant leaders, applauded the agency's change of heart.
"CHA made a wise decision. There were just too many issues associated with drug testing," said Robert Whitfield, Central Advisory Council attorney.