The change follows backlash from allies over Biden's earlier decision to keep the Trump-era limits -- a politically costly moment of confusion that stood out in a White House notable for its iron discipline in its first three months.
"This erases the historically low number set by the previous administration of 15,000, which did not reflect America's values as a nation that welcomes and supports refugees," Biden said in a statement.
"The new admissions cap will also reinforce efforts that are already underway to expand the United States' capacity to admit refugees, so that we can reach the goal of 125,000 refugee admissions that I intend to set for the coming fiscal year."
The program is only for refugees selected by US security and intelligence agencies from United Nations camps around the world.
The course correction was quickly welcomed by the Senate Foreign Relations Committee, which is controlled by Biden's Democratic party.
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