A US federal court has agreed to dismiss charges accusing President-elect Donald Trump of illegally retaining classified documents after he completed his first presidential term and left the White House in 2021.

The US Court of Appeals made the decision on Tuesday granting the request on Monday by the country's lead prosecutor, Special Counsel Jack Smith, to drop the case.

Smith said in court filings that the request was based on the Justice Department's policy against prosecuting a sitting president.

Earlier, a US district court agreed on Monday to dismiss a separate case accusing Trump in relation to the January 2021 Capitol riot in which mobs denied his defeat in the 2020 election.

Smith, who oversaw both prosecutions, also sought to dismiss charges relating to the riot case for the same reason.

With Tuesday's decision by the appeals court, both the two federal cases against Trump have now been dropped.

Smith reportedly plans to submit a final report on the cases and step down from his position before Trump takes office in January.

Trump faces two more criminal cases, but their court procedures have made little progress or the sentencing has been postponed.