The so-called "nutrient neutrality" rules in place were designed to ensure a new development does not add harmful nutrients to nearby waterways.
"Over 100,000 homes held up due to defective EU laws will be unblocked between now and 2030, delivering an estimated 18 billion pound boost to the economy," the government said.
It added that nutrients entering rivers "are a real problem", but the contribution made by new homes is "very small".
Britain, which withdrew from the European Union at the end of January in 2020, also said it would double investment in its nutrient mitigation scheme to 280 million pounds "to offset the very small amount of additional nutrient discharge" from the construction of the new homes.
"I want to see more homes built," Prime Minister Rishi Sunak said on X, formerly Twitter.
"But sometimes hangover EU laws get in the way. It's not right," he added.
The changes, proposed in an amendment to a bill currently going through the upper chamber of parliament, come at a time of of increasing demand for houses but declining supply.
The Home Builders Federation warned earlier this year that housebuilding in the UK could fall to its lowest level since World War II, blaming an over-strict enforcement of EU environmental regulations.
The government's move angered green campaigners.
"Who would look at our sickly, sewage-infested rivers and conclude that what they need is weaker pollution rules? No one, and that should include our government," said Doug Parr, policy director at Greenpeace UK.
Craig Bennett, chief executive of The Wildlife Trusts, said it was a "disgraceful move which undermines public trust in the government".
"The government has made repeated pledges that they won't weaken environmental standards and committed just eight months ago to halve nutrient pollution by the end of the decade," he said.
"This is another broken promise and makes clear that the prime minister would rather look after the interests of developers than the environment -- money talks," Bennett added.
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