Students at John Jay High School and Anson Jones Middle School will no longer have to use ID badges with a tracking device.
Northside Independent School District officials made the decision to end the initiative.
Radio frequency ID tags were part of year-long pilot program aimed at increasing attendance, which would, in turn, increase school funding.
They also were meant to provide a way to track students quickly in case of an emergency.
However, NISD spokesman Pascual Gonzalez said the plan didn't work as well as hoped.
"Following much discussion, the decision was made by the superintendent to cancel this initiative because it really just did not produce the way we thought it might," said Gonzalez.
The tracking system had sparked heated controversy over privacy and religious concerns.
One John Jay High School student even filed a lawsuit against the program citing religious reasons, but lost the case.
On the Facebook group Students Against RFID Tracking, the decision is being called a victory
School officials say the national firestorm of attention was a consideration but the final decision came down to money.
According to Gonzalez, attendance only went up 0.7 percent at Anson Jones Middle School and 0.5 percent at John Jay High School.
While the district spent $271,679 on the technology, they were only able to recoup $136,689 over the year.
Although students won't have to carry RFID tags any more, that doesn't mean the district is getting rid of the technology completely, Gonzalez said. They just haven't decided exactly how they're going to use it yet.
"RFID is in our world. It's not gong to go away. We just need to figure out how it's going to be used in Northside School District," said Gonzalez.