The move, which could come back to haunt Washington in dealing with immigrants from other countries like Mexico, was portrayed by officials as a gesture towards assisting the Northern Ireland peace process.
The six, all of whom have completed their prison terms, were facing deportation back to the UK or Ireland because of misleading statements made to immigration officials on taking up residence in the US. Specifically, they failed to own up to their past criminal convictions.
While the Attorney General, Janet Reno, issued the instruction for the cases to be dropped, the impetus for it came from the Secretary of State, Madeleine Albright. In a statement, Ms Albright said she hoped the move would advance the goal of "a lasting, overall settlement in Northern Ireland".
On his recent visit to Washington, Gerry Adams, the Sinn Fein leader, is believed to raised the cases of the six men with the US government. Sinn Fein also sought assurances from the US on the issue even earlier when the IRA was considering a renewed ceasefire.
British officials meanwhile underscored that the move would have no bearing on extradition cases against three IRA fugitives currently pending in San Francisco. Those, they said, were governed by international extradition treaties, not by domestic laws.
The decision prompted a news conference by 14 members of the US Congress at which Joe Kennedy, of Massachusetts, said the six never considered themselves as criminals. "It was, in fact, politics, not criminality," that led to their imprisonment, he said.
There was jubilation, meanwhile, for the six involved, five of whom live in New York City area. They are Robert McEarlean, Matthew Morrison, Gabriel Megahey, Brian Pearson, Noel Gaynor and Gerald McDade. "I think it's fantastic," Mr Pearson said. "It's a step by the Administration in the right direction of what's happening in Northern Ireland."
The move was welcomed by the Dublin government, which described it as "further evidence of confidence-building measures," but was condemned by Unionist politicians.
Ulster Unionist security spokesman Ken Maginnis MP said: "It would be a very naive individual who did not see this as part of a trilateral conspiracy between three governments who are determined to pay whatever price it takes to ensure that the IRA comes to the conference table."
Democratic Unionist MP Peter Robinson declared: "The irony of this latest sop to IRA terrorists stands out in stark contrast to the United States' attitude to its own terrorists. For them the electric chair or life imprisonment awaits."