Eyewitness News confirmed that Soboroff had been slated to make $500,000 for just 90 days of work.
The office of Mayor Karen Bass told ABC7 he would have been paid by philanthropic organizations, and not taxpayers.
Bass' office released a statement Saturday night, saying Soboroff has agreed to modify his agreement and work for free.
"Steve is always there for LA," said Bass. "I spoke to him today and asked him to modify his agreement and work for free. He said yes. We agree that we don't need anything distracting from the recovery work we're doing. He has always been in this for the people of the Palisades and the people who work there, and we are grateful. There is simply no one like Steve, whose experience inside and outside City Hall includes leading major city commissions, and helping bring the Staples Center, the entirely new neighborhood of Playa Vista, and even the Space Shuttle to LA."
Soboroff has been tasked with working to protect properties and creating a detailed program to rebuild the burn areas.
Mayor Bass appoints Steve Soboroff as 'chief recovery officer' for rebuild from wildfires