Calling it a “Christmas miracle”, President Barack Obama has signed in a new law to overhaul accountability, teacher evaluations and the way the most poorly performing schools are pushed to improve.

The new Every Student Succeeds Act replaces the No Child Left Behind education law, which come under heavy critisicm for its “one-size-fits-all approach” to improving America’s approximately 100,000 schools.

Joined by lawmakers, students and teachers in a White House auditorium, Obama praised the George W Bush-era No Child Left Behind for having the right goals. He said that in practice, it fell short or applied a cookie-cutter approach that failed to produce desired results. Under the new law, the federal government will shift more decision-making powers back to states.

“With this bill, we reaffirm that fundamentally American ideal that every child - regardless of race, gender, background, zip code - deserves the chance to make out of their lives what they want,” Obama said. “This is a big step in the right direction.”

The overhaul ends more than a decade of what critics have derided as one-size-fits-all federal policies dictating accountability and improvement measures for public schools.

But one key feature remains - students will still take federally required statewide reading and math exams. The new law encourages states to limit the time students spend on testing and diminishes the high stakes for underperforming schools.

The long-awaited bill to replace the 2002 law easily passed the Senate on Wednesday and the House last week, in a rare example of the Republican-controlled Congress and Obama finding common ground on major legislation. Obama held it up as an “example of how bipartisanship should work”, noting that opposing sides had compromised to reach a deal.

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