The plan would allow for Britons who opt for it to pay an annual amount - yet to be worked out - to retain full rights as EU citizens after the UK's departure from the EU.
MEP Charles Goerens withdrew his amendment in which he had called for the idea so as to give the plan a new focus which he told supporters "makes it much more likely for the Associate EU Citizenship to succeed".
Mr Goerens, from Luxembourg, said the decision was taken together with the European Parliament’s lead Brexit negotiator Guy Verhofstadt, who also heads Mr Goerens' own Liberals and Democrats group in the parliament.
The associate citizenship idea had initially been included as an amendment to a report by Mr Verhofstadt into possible future reforms of the EU which was discussed at a meeting of the parliament’s constitutional affairs committee today.
He said: “Today I decided together with Guy Verhofstadt to withdraw my amendment on Associate EU Citizenship. We realised that this has become a very important issue that cannot await treaty change - as was my intention when I first tabled my amendment - since this might take years.
“Yesterday evening, the House of Commons decided by a majority of almost 400 to support Theresa May’s plan to trigger article 50 by the end of March 2017. Hence the prospect that Article 50 will be invoked has become very real indeed.
“The European Parliament will define its position on the Brexit agreement through a resolution during spring 2017. This seems to be the best opportunity to give Brexit negotiator Guy Verhofstadt the possibility to enforce the Associate EU Citizenship.”
Mr Verhofstadt said in a statement: "The commemoration of the founding Treaty of Rome in March should mark a new beginning for the European Union. But some things cannot wait until treaty change, as foreseen in this report. Therefore, the ability to keep European citizenship for those who risk losing it will be on the table of the upcoming Brexit negotiations and will be discussed at the moment of the Parliament's resolution, right after the triggering of Article 50 in March."
This came as his report on reform was approved by the committee by a large majority. It is expected to be discussed by the parliament next year.