WASHINGTON (CNN) -- The Pentagon's counterintelligence office is shutting down a database that contained information gathered within the United States, including intelligence about Iraq war protesters.

The Talon reporting system on threats to the Defense Department and domestic military installations will be closed September 17, the Pentagon announced Tuesday. Any data collected will be sent to the FBI until the Pentagon can establish a new program.

Any new database about domestic threats will be handled by the Pentagon's homeland defense office and not by its counterintelligence arm, according to Defense Department officials.

The American Civil Liberties Union applauded the decision.

"It was high time for this program to be shut down," said Anthony D. Romero, executive director of the ACLU. "There should have been no place in a free democratic society for the military to be accumulating secret data on peaceful demonstrators exercising their First Amendment rights."

The Defense Department cannot legally collect information in the U.S. about potential threats to its installations. But in late 2005, Talon made headlines when it was revealed that the Pentagon had kept initial reports in the database about peaceful protesters who posed no apparent threat.

After purging the database of those reports, the Pentagon found the database was not being used. One official said it appeared that counterintelligence and military law enforcement were shying away from Talon because of negative publicity.

Officials are shutting it down because it is infrequently used, a source said. E-mail to a friend

CNN Pentagon correspondent Barbara Starr contributed to this report.