Changes to site terms of use were thought to mean Facebook would claim rights to pictures and profile information and hold on to them even if accounts were deleted.
Since the move two weeks ago, the site has been inundated with complaints from the Facebook community and announced today that it would revert to its old rules.
Account holders found a message on their sites informing them of the change when they logged on today.
Facebook founder Mark Zuckerberg also posted an explanation on the Facebook blog.
He wrote: 'Over the past couple of days we received a lot of questions and comments about the changes and what they mean for people and their information.
'Based on this feedback, we have decided to return to our previous terms of use while we resolve the issues that people have raised.'
But he said there would be changes to the Facebook rules in the future, but in language that would clarify the site's position.
He added: 'Our next version will be a substantial revision from where we are now. It will reflect the principles I described yesterday around how people share and control their information, and it will be written clearly in language everyone can understand.'
Facebook users were advised on the change with a notice posted to their pages when logging in to the service.
The office of the Data Protection Commissioner has the decision.
Deputy Data Protection Commissioner Gary Davis said the change in policy is welcome but that the proposal by Facebook to hold onto the information would not have been possible under European data protection law.
The law gives everyone the right to seek deletion of their personal data and those holding it have to comply with the request.
Mr Davis said Irish people do not seem to be reading privacy statements or terms of use of websites and do not seem to notice changes in terms and conditions.
He said the office of the Data Protection Commissioner is trying educate people to think about how their information is used.
The website, which was founded in the US in 2004, has an estimated 175m users.
