The Texas Health and Human Services Commission sent a letter on Wednesday to the federal Office of Refugee Resettlement (ORR) and threatened to quit the programme unless the Obama administration "unconditionally" gives the green light to the Lone Star state's new plan to control placements in the state by September 30, Xinhua news agency reported.
The dispute came as federal government announced a new goal of resettling 110,000 refugees in the nation next year, including more refugees from war-torn Syria.
Texas has taken in 7,205 refugees over the past 12 months, more than any other state in the country.
Texas will join states like Kansas and New Jersey in exiting the programme over the US government's vetting procedures to screen out potential terrorists from the refugees if it can not reach an agreement with the federal government on this issue.
The state's letter, signed by state refugee coordinator Kara Crawford, was sent in response to the ORR's "unwillingness" to approve the state's new refugee plan, which requires national security officials to ensure that refugees do not pose a security threat to the state, Texas Governor Greg Abbott said in a statement.
"Empathy must be balanced with security, Texas has done more than its fair share in aiding refugees, accepting more refugees than any other state between October 2015 and March 2016," Abbott said.
"While many refugees poses no danger, some may like the Iraqi refugee with ties to the Islamic State who was arrested earlier this year after he plotted to set off bombs at two malls in Houston," he added.
The letter said that Texas would continue to provide services and benefits to private and non-profit refugee agencies until next January.
US federal government officials said that it is impossible for them to guarantee that none could potentially pose a problem, even though the country has a thorough vetting process for incoming refugees.
