A commitment to reach a budget surplus - collecting more in taxes than it spends on public services - has been central to Osborne's vision as Chancellor since taking the office in 2010. The government had pledged to reach a surplus by 2020.
But George Osborne said in a speech in Manchester on Friday that the government had to be "realistic" about the nation's finances following last week's surprise decision by the public to leave the EU.
Here's part of Osborne's speech, as per the Financial Times:
"The government must provide fiscal credibility so we will continue to be tough on the deficit but we must be realistic about achieving a surplus by the end of this decade."
"We need to reduce uncertainty by moving as quickly as possible to a new relationship with Europe and being super competitive, open for business and free trading. That's the plan and we must set to it."
The pound fell to a 31-year low against the dollar in the wake of the Brexit result and the UK's credit rating has been downgraded, both of which make it more costly for the country to borrow.
Most banks and forecasting agencies also now expect the UK to enter a recession in the coming years as uncertainty around exit negotiations depresses investment in the country.
The abandoning of the target comes a day after figures showed Britain's current account deficit is still near record highs. The deficit between taxes collected and amount spent for the first quarter stood at £32. 6 billion, according to the Office of National Statistics.
The Conservative party has repeatedly attacked Labour for "failing to fix the roof while the sun was shining" and have tried to tackle the government's spending deficit. That has led to over half a decade of austerity, as Osborne slashed spending to bring down costs.