"We've agreed that and, as a result, some of the measures we were putting forward - which some in Europe had criticised - we can now no longer need to introduce those and that means that there is a smoother glidepath to a possible deal", Gove told the broadcaster Sky News.
The UK left the EU on 31 January, but as part of the withdrawal agreement, both sides entered an 11-month transition period to negotiate their future commercial relations.
Trade talks have been at an impasse for months over wide divergences on fishing quotas, a level-playing field — the set of common rules and standards designed to prevent businesses in one country from undercutting their rivals in other countries — and governance.
UK Prime Minister Boris Johnson is heading to Brussels on Wednesday for a face-to-face meeting with European Commission President Ursula Von der Leyen in a last-minute attempt to break the deadlock and sign a trade deal before 31 December.
The UK government's decision to drop controversial clauses from the Internal Market Bill may be seen as a gesture of goodwill by London ahead of the said meeting.
Johnson had claimed that the Internal Market Bill, which proposed rolling back some of the commitments the UK made on state aid and customs checks on goods entering Northern Ireland, would ensure barrier-free trade between the UK's four constituent nations in the event the current post-Brexit talks are unsuccessful.
The EU, however, saw the bill's provisions as breaching the "good faith" of the withdrawal agreement as well as putting the Northern Ireland peace agreement at risk and threatened to take legal action against the UK if the legislation was passed into law.
London and Brussels on Tuesday announced that "following intensive and constructive work over the past weeks", European Commission Vice President Maros Sefcovic and Gove, who are the co-chairs of the EU-UK Joint Committee, had reached an "agreement in principle".
"Throughout this year there have been intense talks between ourselves and the European Commission in order to make sure we can resolve the issues on what's called the Northern Ireland Protocol, Gove told the broadcaster.
He explained that Northern Ireland's position is different, because it's the only part of the UK that possesses a land border with the European bloc, meaning that certain additional measures need to be put in place.