The decision was announced Wednesday by NFL Commissioner Roger Goodell during the league's spring meeting in Atlanta.
The policy says not all players will be required to be on the field during the anthem. In a sign that players were not part of the discussions, any violations of the policy would result in fines against the team - not the players. The NFL Players Association said it will challenge any part of the new policy that violates the collective bargaining agreement.
The owners spent several hours addressing the contentious issue - which has reached all the way to the White House.
Former San Francisco 49ers quarterback Colin Kaepernick began kneeling during the national anthem in 2016, a quiet but powerful protest against police brutality and racial inequities in the justice system.
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Other players took up the cause.
The NFL released the following statement by Commissioner Goodell on the national anthem policy:
The policy adopted today was approved in concert with the NFL's ongoing commitment to local communities and our country -- one that is extraordinary in its scope, resources, and alignment with our players. We are dedicated to continuing our collaboration with players to advance the goals of justice and fairness in all corners of our society.
The efforts by many of our players sparked awareness and action around issues of social justice that must be addressed. The platform that we have created together is certainly unique in professional sports and quite likely in American business. We are honored to work with our players to drive progress.
It was unfortunate that on-field protests created a false perception among many that thousands of NFL players were unpatriotic. This is not and was never the case.
This season, all league and team personnel shall stand and show respect for the flag and the Anthem. Personnel who choose not to stand for the Anthem may stay in the locker room until after the Anthem has been performed.
We believe today's decision will keep our focus on the game and the extraordinary athletes who play it -- and on our fans who enjoy it.
The 32 member clubs of the National Football League have reaffirmed their strong commitment to work alongside our players to strengthen our communities and advance social justice. The unique platform that we have created is unprecedented in its scope, and will provide extraordinary resources in support of programs to promote positive social change in our communities.
The membership also strongly believes that:
1. All team and league personnel on the field shall stand and show respect for the flag and the Anthem.
2.The Game Operations Manual will be revised to remove the requirement that all players be on the field for the Anthem.
3. Personnel who choose not to stand for the Anthem may stay in the locker room or in a similar location off the field until after the Anthem has been performed.
4. A club will be fined by the League if its personnel are on the field and do not stand and show respect for the flag and the Anthem.
5. Each club may develop its own work rules, consistent with the above principles, regarding its personnel who do not stand and show respect for the flag and the Anthem.
6. The Commissioner will impose appropriate discipline on league personnel who do not stand and show respect for the flag and the Anthem.
The NFLPA says it was not consulted in the development of this new policy. They released the following statement moments after the NFL announced the policy:
"The NFL chose to not consult the union in the development of this new "policy." NFL players have shown their patriotism through their social activism, their community service, in support of our military and law enforcement, and yes, through their protests to raise awareness about the issues they care about.
The vote by NFL club CEOs today contradicts the statements made to our player leadership by Commissioner Roger Goodell and the Chairman of the NFL's Management Council John Mara about the principles, values, and patriotism of our League.
Our union will review the new "policy" and challenge any aspect of it that is inconsistent with the collective bargaining agreement."
The Associated Press contributed to this report.