Schools will not be required to complete the early years foundation stage profile in 2021, the government has said.
The Department for Education is instead asking schools to "make their best endeavours" to complete the assessment.
The news comes after the government announced that summer key stage 1 and key stage 2 assessments would not go ahead this year because of the Covid crisis.
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The DfE said in December that schools "must complete the EYFS profile for each child who will be five years old on, or before, 31 August 2021".
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But the department has now decided that the assessment should no longer be mandatory this year, in light of disruption caused by the pandemic.
Schools that decide they are able to carry out the EYFS profile this summer will not be subject to statutory external moderation, the DfE said.
Schools minister Nick Gibb said: "Education continues to be a national priority, with the early years being some of the most crucial for a child's development. Teachers are working hard to adjust to the challenges they face at this time so that every child receives the excellent education they deserve.
"In recognition of the additional pressures Reception teachers face, it will not be mandatory to complete the early years foundation stage profile assessment in 2021 but instead we will be asking schools to make their best endeavours to do it.
"We are determined to give children a strong foundation for their future and will continue to monitor the situation and work with schools on next steps."