It comes just two days after a deal was publicly announced that would have spared the men, including Khalid Sheikh Mohammed, a close associate of Osama bin Laden, from the death penalty.
According to the New York Times, Mohammed and accomplices Mustafa Ahmed Adam al-Hawsawi and Walid Muhammad Salih Mubarak bin Attash had agreed to plead guilty to conspiracy charges which would have carried a life sentence.
Mohammed, who is currently detained in the controversial Guantanamo Bay prison facility, is believed to have been the mastermind behind the plot to fly hijacked planes into the World Trade Center’s Twin Towers in New York City and the Pentagon in Virginia on 11th September, 2001.
Almost 3,000 people were killed in the attacks.
On Wednesday, Susan Escallier, who oversees the Pentagon's Guantanamo war court, announced she had signed the deal that would spare the three men from the death penalty.
However, in a memo issued on Friday, Secretary Austin relieved Ms Escallier of her authority to enter into pre-trial agreements in the case.
“In light of the significance of the decision to enter into pre-trial agreements with the accused… responsibility for such a decision should rest with me as the superior convening authority,” Mr Austin said.
"Effective immediately, in the exercise of my authority, I hereby withdraw from the three pre-trial agreements," he added.
Families of the victims of 9/11 expressed satisfaction with the new decision. However, Gary D. Sowards, Mohammed’s lawyer, was critical of Austin’s move.
He told the New York Times: “I am respectfully and profoundly disappointed that after all of these years the government still has not learned the lessons of this case, and the mischief that results from disregarding due process and fair play.”
