The move comes after several recalls, and states, including California, have passed laws to limit cadmium use. The metal is believed to cause cancer and other diseases over time.
The new .03 limit is voluntary, but the Consumer Product Safety Commission says it will use the limit in deciding whether to pursue product recalls.
Because the limits are voluntary, there is no automatic penalty for jewelry sold with cadmium levels exceeding them.
CPSC has argued that voluntary limits were the appropriate - and fastest - way to create a common understanding of what would constitute a problem piece of jewelry. The agency said that unless it finds widespread failure to comply, it will not seek mandatory rules.
The Associated Press contributed to this report.