WASHINGTON - Calling it a "Christmas miracle," President Obama signed a sweeping overhaul of the No Child Left Behind education law on Thursday, ushering in a new approach to accountability, teacher evaluations and the way the most poorly performing schools are pushed to improve.

Joined by lawmakers, students and teachers in a White House auditorium, Obama praised the George W. Bush-era No Child Left Behind for having the right goals. He said that in practice, it fell short or applied a cookie-cutter approach that failed to produce desired results. Under the new law, the federal government will shift more decision-making powers back to states.

"With this bill, we reaffirm that fundamentally American ideal that every child - regardless of race, gender, background, zip code - deserves the chance to make out of their lives what they want," Obama said. "This is a big step in the right direction."

The overhaul ends more than a decade of what critics have derided as one-size-fits-all federal policies dictating accountability and improvement for the nation's 100,000 or so public schools. But one key feature remains: Students will still take federally required statewide reading and math exams. Still, the new law encourages states to limit the time students spend on testing and diminishes the high stakes for underperforming schools.

The long-awaited bill to replace the 2002 law easily passed the Senate on Wednesday and the House last week, in a rare example of the GOP-controlled Congress and Obama finding common ground on major legislation. Obama held it up as an "example of how bipartisanship should work," noting that opposing sides had compromised to reach a deal.

"That's something that you don't always see here in Washington," Obama said. "There wasn't a lot of grandstanding, a lot of posturing, just a lot of good, hard work."

Rep. John Kline (R., Minn.), who chairs the House's education panel, said that under the new approach, American classrooms will no longer be "micromanaged" by the Education Department in Washington.

"Instead, parents, teachers, and state and local education leaders will regain control of their schools," said Kline, part of the bipartisan quartet that spearheaded the bill.

The new law eliminates the federal mandate that teacher evaluations be tied to student performance on the statewide tests. Teachers' unions hated that idea, saying the high stakes associated with the tests were creating a culture of over-testing and detracting from the learning environment.

States and districts will still be able, but not required, to link scores or consider them as a factor in teacher performance reviews.