Holly Harris, the president and executive director of Justice Action Network, a bipartisan criminal justice reform group, hailed the reversal.
“The constant threat of returning to prison was so terrible,” she said. “People have gotten jobs and reconnected with their children. The relief they have to be feeling right now is overwhelming.”
The Trump-era memo had created a state of dread for those in home confinement.
“We’d been told over and over that the memo was off-limits and that there was no hope of reversing it,” Ms. Harris said. “But we’d been aware of other memos that had been overturned, and we felt that the administration could do it.”
In a phone call, Mr. Garland told Ms. Harris that the new opinion represented the legally correct conclusion. She said she also believed it was morally correct.
The Office of Legal Counsel said in its new memo that a more accurate reading of the law gave the Bureau of Prisons “discretion to permit prisoners in extended home confinement to remain there.”
Mr. Garland said in a statement that the Justice Department would come up with rules that would ensure that it “lives up to the letter and the spirit of the CARES Act.”
The Justice Department has declined to reverse other high-profile legal decisions that were made under President Donald J. Trump. It continued to keep secret a memo related to how William P. Barr, the former attorney general, considered how to interpret the findings of the special counsel’s report on Russian interference in the 2016 election. The department also chose to continue to defend Mr. Trump in a defamation suit filed by the writer E. Jean Carroll.