The decision came as about 650,000 civilian workers began their fifth week of furloughs, which have riled department employees and prompted many to complain directly to Hagel during his visits to military bases in recent weeks.
At Hill Air Force Base in Utah, Col. Kathryn Kolbe, 75th Air Base Wing commander, called the announcement "good news" in a prepared statement and said most of Hill's 11,000 civilian employees will have completed their six-day furloughs by Aug. 17.
"I would like to thank our civilian workforce for their patience and continued dedication to our installation's diverse missions, during the furlough period," Kolbe's statement said.
Tooele Army Depot spokeswoman Kathy Anderson on Tuesday said the change in policy means furloughs will end Aug. 19 at the western Utah depot.
"People are eager to go back to work," Anderson said. "The news from the [Department of Defense] will boost morale and ease worry."
Some 670 civilian employees work at TAD.
Hagel has been saying that budget people were trying to find savings to shorten the furlough time. But officials also have cautioned that the savings are for this year only, and won't affect likely budget cuts in 2014, if Congress doesn't act to avoid automatic, across-the-board cuts slated for next year.
The 11 furlough days were expected to save roughly $2 billion.
Officials said the savings are the result of a number of things, including penny-pinching by the military services and Congress' decision to give the Pentagon more flexibility in moving money around between accounts. They indicated that budget crunchers moved money from lower priority accounts in order to free up money to reduce the furloughs and provide additional resources to other programs that directly affect the military's readiness for combat.
During his recent visits to bases in North Carolina, South Carolina and Florida, Hagel was peppered by with questions by civilian defense employee worried about the furloughs and their job security. Some gasped in surprise as the Pentagon chief warned that budget cuts would likely continue next year, probably triggering more furloughs and possibly, layoffs.
Facing $37 billion in budget cuts this year, Pentagon leaders initially announced the 11 furlough days, arguing they needed to shift money to other priorities, including combat training, flight hours, and efforts to bring tons of equipment out of Afghanistan. Since then, budget chiefs have been analyzing the numbers in a persistent effort to find unspent dollars as they neared the end of the fiscal year.
A law enacted two years ago ordered the government to come up with $1.2 trillion in savings over a decade. The law included the threat of annual automatic cuts as a way of forcing lawmakers to reach a deal, but they have been unable to do so. The Pentagon, as a result, is facing $500 billion in cuts over the next decade. For the 2014 budget year, that will mean a reduction of up to $54 billion from current spending totals.
About 85 percent of the department's civilians have been subject to furloughs. The bulk of the exempt employees are foreign nationals or workers not paid through appropriated funding. Nearly 7,000 defense intelligence workers are also exempt, along with about 29,000 workers at Navy shipyards, where officials worried that the harm to shop maintenance would end up costing more than the salary cuts would save.
Peg McEntee contributed to this report