The security clearance of 47-year-old Kushner, who is also Trump's senior adviser, was downgraded after months of delays in completing his background check, reports said.
Kushner was notified of the downgrade in a memo on Friday, along with other White House aides who had access to the highest-level interim clearances, Politico and others reported.
Kushner and the aides previously held what is known as 'Top Secret/SCI-level' clearances, which provided them with unfettered access to classified information and some of the countrys most guarded secrets.
Kushner and his wife Ivanka Trump, the presidents eldest daughter, have enjoyed a special status within the White House as both family members and assistants to the president.
Kushner recently has embraced a lower profile as more questions have been raised about his interactions with foreign officials and about his financial entanglements.
The White House did not comment on the memo on security clearance to Kushner.
"We do not comment on individual security clearances. We actually haven't commented on Jared's. But we have commented on his ability to do his job, which he's a valued member of the team, and he will continue to do the important work that he's been doing since he started in the administration," White House Press Secretary Sarah Sanders told reporters.
Abbe Lowell, an attorney for Kushner, said that he "has done more than what is expected of him in this process."
The changes would "not affect Mr Kushner's ability to continue to do the very important work he has been assigned by the president."
Kushner is currently in charge of the Middle East Peace process.
The decision to reduce Kushner's access to classified information was made after John F Kelly, the White House chief of staff, announced plans to overhaul the security clearance process at the White House
"As I told Jared days ago, I have full confidence in his ability to continue performing his duties in his foreign policy portfolio including overseeing our Israeli-Palestinian peace effort and serving as an integral part of our relationship with Mexico," Kelly said in the statement.
Last week, Trump had expressed his frustration over the current process of security clearances.
Kushners business background, and the well-publicised financial woes of his family's real estate empire, have long raised concerns in American security agencies that foreign governments might try to gain influence inside the Trump White House by trying to do business with the presidents son-in-law, The New York Times said.
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