However the crackdown, which has seen more than 6,000 people killed in seven months, was set to continue with Duterte ordering the military and a drug enforcement agency under the president's office to carry on.
"I have ordered the police to stop all operations," Duterte said during a speech to give military awards at the presidential palace.
"No policemen in this country anywhere is allowed to enforce laws related to the drug campaign."
Duterte's comments came a day after he described the police force as "corrupt to the core", following a series of scandals in which officers were accused of using the drug war as cover for murder, kidnapping, robbery and extortion.
Duterte said then he planned to "cleanse" the police force before allowing it to return to the drug war frontlines, while in the meantime the Drug Enforcement Agency would take the lead with the support of the military.
Duterte also on Monday extended the timeframe for his drug war until the end of his term in 2022. Previously he had imposed a deadline of March this year.
Duterte won presidential elections last year after promising during the campaign to eradicate drugs in society by killing tens of thousands of people.
Since then, police have reported killing more than 2,550 people and nearly 4,000 others have died in unexplained circumstances, according to official figures.
Duterte had previously been unrepentant in the face of widespread international criticism of the drug war, including accusations the police were murdering people for their own gain and organising anonymous vigilante death squads.
He promised repeatedly to shield police from prosecution if they were charged with murder for killing in the drug war.
But the cascading number of scandals surrounding the police in recent weeks forced Duterte to act.
In one of the highest-profile scandals, anti-drug officers allegedly kidnapped a South Korean businessmen, then murdered him inside the national police headquarters as part of an extortion racket.
Amnesty International said Tuesday it expected the killings to continue regardless of Duterte's decision to pull police off the drug war.
"Even as the police claim to have halted their operations, President Duterte has pledged to continue his so-called ‘war on drugs’," Amnesty International’s crisis response director Tirana Hassan said in a statement.
"These contradictory statements offer little hope that the wave of extrajudicial executions that has claimed more than a thousand lives a month will end."
