Defense Secretary Chuck Hagel on Monday cancelled a new combat medal for US troops who launch drone strikes or cyber attacks after a torrent of criticism from veterans and lawmakers.

Hagel opted to scrap the new "Distinguished Warfare Medal" for a pin or device that could be added to existing medals to recognize service members operating unmanned aircraft or cyber weapons, Hagel said in a statement.

The now cancelled medal had provoked outrage among active duty and retired troops, who called it insulting due to its high ranking in the military's hierarchy of traditional combat medals -- above the prestigious Bronze Star for valor and the Purple Heart.

"When I came into office, concerns were raised to me about the Distinguished Warfare Medal's order of precedence by veterans' organizations, members of Congress, and other stakeholders whose views are valued by this department's leadership," Hagel said.

The medal was approved by Hagel's predecessor, Leon Panetta, shortly before he left office, but immediately ignited criticism in and outside the military.

After taking over at the Pentagon in February, Hagel ordered a review by top military leaders led by the chairman of the Joint Chiefs of Staff, General Martin Dempsey.

The review "found that misconceptions regarding the precedence of the award were distracting from its original purpose," according to Hagel's statement.

The joint chiefs and civilian secretaries for each service recommended the creation of a device "that can be affixed to existing medals to recognize the extraordinary actions of this small number of men and women," the statement said.

Hagel agreed with the recommendation and ordered that criteria for the award be presented to him within 90 days.

The American Legion, the country's largest veterans service organization, welcomed the move, saying it kept the evolving roles of military combat in "proper perspective," it said in a statement.

"Cyber and drone warfare have become part of the equation for 21st-century warfare, and those who fight such battles with distinction certainly deserve to be recognized.

"But The American Legion still believes there's a fundamental difference between those who fight remotely, or via computer, and those fighting against an enemy who is trying to kill them," said James Koutz, national commander of the American Legion.