The software, called Greyball, seeks to identify officials around the world trying to catch Uber drivers operating illegally. It then denies them service.
The ride-hailing firm has been using the tool to secure early access to cities where its operations had not yet been authorized.
But having defended the system just a few days ago, it has now done a U-turn.
"We are expressly prohibiting its use to target action by local regulators going forward," said Uber's chief security officer Joe Sullivan.
He said the same technology had also been used for many other purposes, including for marketing promotions and deterring Uber riders using the app in violation of the company's term of service. These are understood to include stopping users aiming to physically harm drivers and targeting competitors looking to disrupt operations.
These uses will not be affected by the ban.
Mr Sullivan said that because of the way the system was configured, it would take some time to ensure the prohibition was fully enforced.
What is Greyball?
Greyball identified regulators posing as ordinary passengers, by collecting data on the location used when ordering a taxi and determining whether this coincided with government offices.
A report by The New York Times found that it also checked credit card information to establish whether the user was linked to an institution or law enforcement authority.
Uber, the report added, even visited phone shops to trace smartphones bought by city officials setting up multiple accounts in an effort to catch the company's drivers.
Once individuals suspected of attempting to entrap drivers were identified, they would be served a "fake" version of the Uber app, with fictitious cabs on view. If there were they were successful in ordering a real one, they would have their booking cancelled.
Uber has been hit by a series of controversies recently. A video of its chief Travis Kalanick swearing at a driver appeared on social media, and there had also been allegations the company had routinely ignored cases of sexual harassment.