US President Donald Trump has signed an executive order requiring federal agencies to prioritise hiring American residents (as well as green card holders) over foreign workers.

The order also requires federal agencies to complete an internal audit to ensure they don't appoint foreign technical workers to competitive service, replacing American citizens.

The order to ban workers on H-1B visas from occupying jobs in federal agencies comes after the federally-owned Tennessee Valley Authority (TVA) announced plans to outsource around 20 percent of its technology jobs to foreign-based companies.

As a result, Trump said he was removing two appointees of the TVA's board of directors, including Chairman James Thompson, and threatened to remove TVA CEO Jeff Lyash from office.